Reverse Mortgage Competition Isn't As Bad As Predicted
A new report revealed that the previously predicted competition among reverse mortgage lenders hasn't been as high as we all thought it would. Yes, there is a bit of competition, however, a new Reverse Mortgage Daily report claims that "margins on adjustable-rate" HECMs look to be settling.
“The simple average from April to June has decreased slightly from 2.11% to 2.05% to 2.04%, but we are not seeing a ‘race to the bottom,'” said Baseline Reverse founder Dan Ribler according to RMD.
The report also stated that the majority of reverse mortgage loans are being priced between the 1.5% and 2% margins, which doesn't leave much room for added competition.
“It still creates the potential to give a loan to this client, but the lenders must be flexible in the margins they offer,” revealed author and reverse mortgage professional Dan Hultquist in an RMD report last Fall.
“They’re going to have to reach down deeper to provide lower lender margins, and, of course, lower lender margins may protect borrowers with higher loan amounts.”
RMD does note that in rare cases, margins can dip to as little as .05%. However, these cases are outliers and aren't likely to become a trend.
To learn more about the current reverse mortgage loan margins and competition among lenders, click on the image above.
