Reverse Mortgage Insights from a Las Vegas Certified Reverse Mortgage Professional

Rick R. Rodriguez was interviewed by Reverse Mortgage Daily recently to offer his insights on the impact of rising interest rates to the reverse mortgage program. The Federal Government recently increased interest rates once again which created a ripple effect throughout the mortgage industry. Prior to October 2017, the reverse mortgage program experienced very little change from interest rate fluctuations. However, since HUD made significant program changes in October 2017 the program is more susceptible to interest rate swings than ever before. These swings are directly effecting the amount of equity that homeowners can qualify for under the program, which in some cases can prevent them from obtaining a reverse mortgage.

Reverse Mortgage Daily wrote a recent article titled "HECM Originators Feel Impact of Rising Rates", in which they interviewed Rick R. Rodriguez, a branch manager at Nationwide Equities in Las Vegas, NV. One of his clients was in the process of using a H4P (HECM for Purchase) to buy a home before rates went up. The client had an accepted offer on a home, however the transaction was cancelled due to a disagreement over the appraisal. When she shifted her interest to another property, the numbers had unfortunately changed.

"She is now looking to make an offer on another property, however the cash required is now approximately $5,000 higher due to the change in expected rate and principal limit," Rodriguez said. "She is currently digesting the change, and she may decide to lower her max purchase price."

He said there may be similar impacts with refinances requiring a lender to make concessions if they are able or resulting in a borrower who may not qualify.

I haven't had any of those situations - thank goodness - but I can see that as a reality right now," he said.

Read the complete article in Reverse Mortgage Daily here.

Anyone who is looking into a reverse mortgage should be aware that interest rates are more volatile right now than they have been in quite some time. The Federal Government has announced recently that more interest rate increases are expected over the end of 2018 and beginning of 2019.