This week, because of the floor used in finding Principal Limit Factors (PLF’s), all Treasury-based HECM’s with a margin of +136 or less will give the same maximum PLF’s as will all LIBOR-based HECM’s with margins of +68 or less. Using these margins, the initial note rate on a LIBOR HECM will be 77 bp less than that on a Treasury HECM. LIBOR HECM should have some traction!
A monthly-adjusting Treasury HECM+150 will pay $2,750 less this week to the average HECM borrower. That’s $5,500 less over the last two weeks.
Ibis software handles many different indices. The rates of Tuesday are:
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