Characteristics of Kosher HECM Reverse Mortgages on 10/01/2023
Table 1

Prices of HECM Reverse Mortgages to a Borrower of 70 With a Home Worth $600,000 and Existing Mortgage Balances of Varying Amounts: Mainstream Versus Kosher Markets
Existing Mortgage Balance Mainstream Market Kosher Market
FRM ARM FRM ARM
Interest Rate Origination Fee Interest Rate Origination Fee Interest Rate Origination Fee Interest Rate Origination Fee
Zero 5.060% $6,000 2.703% $6,000 4.500% -$40 2.578% $2,500
$100,000 5.060% $6,000 2.703% $6,000 4.250% -$1,018 2.735% $0
$200,000 5.060% $6,000 2.703% $6,000 3.990% $0 2.860% -$6,053
$300,000 5.060% $6,000 2.703% $6,000 3.990% $0 2.735% -$6,036
Note: Kosher prices are the lowest of those obtained from participating lenders who deliver their prices daily to www.mtgprofessor.com. Mainstream prices are estimates of NRMLA, the trade association of reverse mortgage lenders, posted in its calculator at www.nrmlaonline.org.
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Relevant Readings:
Eliminating Dysfunction in the Reverse Mortgage Market



Table 2

Prices and Transaction Costs
[Borrower Age 70 With Home Worth $350,000 and Mortgage Balance of $175,000]
Fixed Rate with Lowest Interest Rate Fixed Rate with Lowest Origination Fee Adjustable Rate with Lowest Interest Rate Adjustable Rate with Lowest Origination Fee
Interest Rate 3.990% 4.990% 2.059% 3.059%
Origination Fee (%) 1.327% -1.856% -0.194% -5.028%
Financed Settlement Costs $13,460 $3,838 $9,180 $2,058
Origination Fee $2,500 $-7,122 $-1,780 $-8,902
Mortgage Insurance $8,750 $8,750 $8,750 $8,750
Other (Estimated) $2,210 $2,210 $2,210 $2,210
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Relevant Readings:
Pricing a Reverse Mortgage



Table 3

Available Draw Options
[Borrowers of Different Ages With Different Amounts of Homeowner Equity]
Borrower Age Option 1: Cash Draw Option 2: Monthly Payment Option 3: Unused Credit Line
Available Within First 12 Months Available in 10 Years
Tenure 10 Years 5 Years No Rate Change Maximum Rate
Property Value $100,000
62 $47,987 $256 $519 $909 $50,684 $82,912 $124,601
70 $55,185 $307 $576 $1,008 $57,401 $81,814 $196,620
78 $61,585 $394 $646 $1,131 $64,058 $91,302 $219,423
86 $68,485 $571 $722 $1,263 $71,235 $101,531 $244,007
Property Value $200,000
62 $99,420 $534 $1,082 $1,893 $105,008 $171,778 $258,148
70 $111,818 $637 $1,196 $2,092 $116,308 $165,773 $398,398
78 $124,618 $840 $1,371 $2,392 $129,622 $184,750 $444,004
86 $138,418 $1,206 $1,522 $2,657 $143,976 $205,209 $493,172
Property Value $300,000
62 $150,852 $837 $1,681 $2,933 $159,331 $260,643 $391,695
70 $168,450 $994 $1,853 $3,233 $175,215 $249,733 $600,176
78 $187,650 $1,265 $2,064 $3,601 $195,186 $278,198 $668,584
86 $208,350 $1,816 $2,291 $3,999 $216,718 $308,886 $742,337
Property Value $400,000
62 $202,285 $1,119 $2,247 $3,921 $213,655 $349,508 $525,243
70 $225,083 $1,329 $2,475 $4,320 $234,122 $333,693 $801,954
78 $250,683 $1,689 $2,757 $4,811 $260,750 $371,646 $893,165
86 $278,283 $2,426 $3,061 $5,341 $289,459 $412,563 $991,502
Note: Borrowers can also draw smaller amounts of multiple options.
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Relevant Readings:
Which HECM Options Meet Your Needs?



Table 4

Capacity to Repay Existing Mortgage: The Largest Existing Mortgage Balance That Can Be Paid Off
[Borrowers of Different Ages With Different Amounts of Homeowner Equity]
Property Value Age of Borrower
62 67 72 77 82 87
$100,000 $48,511 $51,743 $55,278 $59,318 $63,661 $68,206
$200,000 $100,564 $107,156 $114,366 $122,606 $131,464 $140,734
$300,000 $153,140 $163,124 $174,044 $186,524 $201,962 $216,137
$400,000 $206,765 $220,205 $234,905 $251,705 $269,765 $288,665
Note: Borrowers with smaller balances can draw funds in any of the ways shown in Table 3. Borrowers with larger balances must put up cash to supplement the HECM.
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Relevant Readings:
Retiring With a Mortgage Balance: What to Do?
Transitioning From a Standard Mortgage to a Reverse Mortgage



Table 5

Monthly Payment Available
[Borrowers of Different Ages With Different Amounts of Homeowner Equity]
Borrower Age Payment Period: Tenure in House Payments Over Shorter Periods
Monthly Payment Debt in 5 Years Debt in 10 Years 3 Years 5 Years 10 Years
Property Value $100,000
62 $256 $24,237 $50,180 $1,433 $909 $519
70 $307 $27,762 $58,416 $1,590 $1,008 $576
78 $394 $33,817 $72,561 $1,783 $1,131 $646
86 $571 $46,123 $101,312 $1,991 $1,263 $722
Property Value $200,000
62 $534 $44,792 $96,932 $2,985 $1,893 $1,082
70 $637 $51,962 $113,683 $3,299 $2,092 $1,196
78 $840 $63,039 $143,335 $3,767 $2,392 $1,371
86 $1,206 $88,626 $203,323 $4,184 $2,657 $1,522
Property Value $300,000
62 $837 $64,141 $144,640 $4,620 $2,933 $1,681
70 $994 $75,092 $170,316 $5,092 $3,233 $1,853
78 $1,265 $93,947 $214,521 $5,672 $3,601 $2,064
86 $1,816 $132,426 $304,738 $6,298 $3,999 $2,291
Property Value $400,000
62 $1,119 $85,070 $192,434 $6,175 $3,921 $2,247
70 $1,329 $99,686 $226,701 $6,804 $4,320 $2,475
78 $1,689 $124,854 $285,709 $7,578 $4,811 $2,757
86 $2,426 $176,226 $406,152 $8,412 $5,341 $3,061
Note: While the payments shown are the largest available, borrowers are not locked in. They can switch to a credit line at any time.
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Relevant Readings:
Delay Taking Social Security With a HECM Term-Payment



Table 6

Available Cash Draw For Home Purchase
[Borrowers of Different Ages With Different Amounts of Homeowner Equity]
Borrower Age HECM Reverse Mortgage Financing Cash Required From Other Sources
Amount Available for Purchase HECM Debt at Closing HECM Debt in 10 Years
Property Value $100,000
62 $47,985 $52,572 $92,571 $52,015
70 $53,185 $57,789 $101,758 $46,815
78 $59,585 $64,210 $113,064 $40,415
86 $66,485 $71,133 $125,254 $33,515
Property Value $200,000
62 $97,418 $105,144 $185,143 $102,583
70 $107,818 $115,579 $203,516 $92,183
78 $120,618 $128,421 $226,129 $79,383
86 $134,418 $142,266 $250,508 $65,583
Property Value $300,000
62 $146,850 $157,717 $277,714 $153,150
70 $162,450 $173,368 $305,274 $137,550
78 $181,650 $192,631 $339,193 $118,350
86 $202,350 $213,399 $375,762 $97,650
Property Value $400,000
62 $196,283 $210,289 $370,286 $203,718
70 $217,083 $231,157 $407,032 $182,918
78 $242,683 $256,841 $452,257 $157,318
86 $270,283 $284,532 $501,016 $129,718
Note: Borrowers may elect to take less than the maximum in order to reserve borrowing power for future use.
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Relevant Readings:
Four Ways to Purchase a House With a Reverse Mortgage



Table 7

Available Credit Line Now and In the Future
[Borrowers of Different Ages With Different Amounts of Homeowner Equity]
Borrower Age Unused Credit Line Loan Balance At Closing
At Closing After 12 Months After 10 Years at Current Interest Rate After 10 Years at Maximum Interest Rate
Property Value $100,000
62 $27,027 $47,987 $86,858 $124,601 $4,433
70 $32,145 $55,185 $97,492 $196,620 $2,423
78 $35,985 $61,585 $108,798 $219,423 $2,423
86 $40,125 $68,485 $120,988 $244,007 $2,423
Property Value $200,000
62 $57,500 $99,420 $179,952 $258,148 $5,405
70 $65,738 $111,818 $197,540 $398,398 $3,394
78 $73,418 $124,618 $220,153 $444,004 $3,394
86 $81,698 $138,418 $244,533 $493,172 $3,394
Property Value $300,000
62 $87,972 $150,852 $273,046 $391,695 $6,377
70 $99,330 $168,450 $297,589 $600,176 $4,364
78 $110,850 $187,650 $331,508 $668,584 $4,364
86 $123,270 $208,350 $368,078 $742,337 $4,364
Property Value $400,000
62 $118,445 $202,285 $366,140 $525,243 $7,349
70 $132,923 $225,083 $397,638 $801,954 $5,335
78 $148,283 $250,683 $442,863 $893,165 $5,335
86 $164,843 $278,283 $491,622 $991,502 $5,335
Note: Current interest rate is 4.231%. Maximum interest rate is 14.231%.
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Relevant Readings:
To Avoid Outliving Your Money, Take a HECM Reverse Mortgage Before Interest Rates Rise
Senior Homeowners Can Reduce the Risk of Outliving Their Money But They Need to Unlearn a Shopping Rule
Note: Kosher HECM reverse mortgages are those that have been evaluated uising the professor’s calculator, based on prices available from loan providers who deliver their prices to www.mtgprofessor.com. The prices shown are the lowest of those reported, and the draw amounts are therefore the largest available.