HECM Loans in Utah – How UT Reverse Mortgages Work

Are you a senior in the state of Utah considering a reverse mortgage? If so, we’ve put together this guide covering the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM), which is by far the most popular version of this loan for UT seniors.

Beyond the basics of how it all works, you will find information on:

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An Introduction to Reverse Mortgages in Utah

There are really three financial strategies – meaning how you take the payout or funds – for home owners seeking to utilize a reverse mortgage.

We will examine all three:

  1. Taking a lump sum
  2. Opening a line of credit
  3. Monthly annuity

Each of these options has pros and cons to a home owner’s circumstances and level of personal financial responsibilities.

Taking a Lump Sum

This is probably the most popular of the three. There are a wide variety of reasons that a Utah home owner would want a lump sum. Some of these reasons are much more financially responsible than others.

Using a reverse mortgage to borrow enough equity in a house in a lump sum to pay off an existing mortgage is one of the most frequent uses of a reverse mortgage and is financially responsible approach. It is estimated that half of reverse-mortgage borrowers have used the funds for this purpose. This is a responsible way to take a lump sum payout, and often a necessary one – if you have an existed mortgage, you need to pay it off as part of the terms of obtaining a HECM loan.

According to one study, nearly 40% of seniors have a mortgage. This figure has doubled from 25 years ago. Using a reverse mortgage to eliminate a traditional mortgage turns a monthly budget on its head by freeing the funds of a home owner’s largest monthly expense.

Where taking a lump sum is ill advised is when it’s being used to buy toys. Home owners using their equity to purchase a sports car, new boat or anything that depreciates is simply not being financially responsible. If the home owner can’t afford it, they should not use a reverse mortgage to finance it.

Opening a Line of Credit in UT

Many financial gurus suggest that homeowners establish a line of credit using the HECM regardless of the need. The approach can secure the home owner with a safety net, and it can be utilized in several ways. As the need arises, it can protect a home owner’s savings or even increase their income in retirement.

In many cases, a line of credit it smarter than borrowing a lump sum and keeping it in reserve. Due to the inner-workings of the reverse-mortgage terms, the portion of a line of credit that is not used, grows in equity over the years, giving the homeowner access to more cash.

Monthly Annuity

The final option for a Utah senior considering a HECM loan is to receive a monthly annuity, which is just a fancy way of saying a monthly payout. Here, there are two options – with a tenure annuity, you’ll receive this payment for as long as you remain in the home. With the term annuity, you pick a set period of time to receive payments, at which point they stop.

You can also combine these three options into a plan that makes sense for you. For example, you could set up an annuity and a line of credit together. In fact, this flexibility is one of the best features of the reverse mortgage.

There are many ways to use a reverse mortgage to assist in achieving retirement goals. Knowing your limits and your discipline levels can secure your future.

Ready to learn more? Click here to get free information about a reverse mortgage in Utah!

Largest Utah Reverse Mortgage Lenders

To date, there have been well over 14,000 reverse mortgages originated in the state of Utah. Wells Fargo, a lender that existed the business years ago, is still the largest originator of all time. With that in mind, we’ve broken down the top lenders into two groups, the all time leaders and the leaders since 2012.

All Time

Lender Loans Total Principal Limit
WELLS FARGO 1,926 382,175,860
CHERRY CREEK MORTGAGE CO INC 1,509 534,896,773
AMERICAN ADVISORS GROUP 1,046 350,949,810
AMERICA FIRST FEDERAL CREDIT UNION 1,020 238,122,821
MOUNTAIN AMERICA CREDIT UNION 834 197,009,108
ZIONS FIRST NATIONAL BANK 679 105,266,590
FSI MORTGAGE LLC 672 141,365,136
REVERSE FREEDOM LLC 607 261,188,909
AIM MORTGAGE INC 583 57,188,171
SECURITYNATIONAL MORTGAGE COMPANY 457 131,455,749
FINANCIAL FREEDOM SENIOR FUNDING CORP 420 76,946,705
HERITAGE HOME LOANS LLC 412 160,836,469
FINANCE OF AMERICA REVERSE LLC 382 122,719,425
ACCESS MORTGAGE LLC 336 63,550,554
REPUBLIC MORTGAGE HOME LOANS LLC 331 83,230,781
VERITAS FUNDING LLC 328 114,510,770
ONE REVERSE MORTGAGE LLC 291 77,804,775
ACADEMY MORTGAGE CORPORATION 283 101,856,726
SUN WEST MORTGAGE CO INC 279 75,167,089
ENVISION LENDING GROUP INC 278 65,638,594

Since 2012:

Lender Loans Total Principal Limit
CHERRY CREEK MORTGAGE CO INC 1,220 443,800,814
AMERICAN ADVISORS GROUP 1,031 347,576,810
REVERSE FREEDOM LLC 607 261,188,909
AMERICA FIRST FEDERAL CREDIT UNION 422 115,701,079
HERITAGE HOME LOANS LLC 412 160,836,469
VERITAS FUNDING LLC 327 114,335,770
MOUNTAIN AMERICA CREDIT UNION 302 85,300,820
ACADEMY MORTGAGE CORPORATION 254 94,947,566
CHERRY CREEK MORTGAGE LLC 253 116,624,985
ONE REVERSE MORTGAGE LLC 215 62,512,775

Want to learn more? Click here to get free information about a reverse mortgage!

Current & Historic Interest Rates

HUD releases data on reverse mortgage originations each month, and one data point is the interest rate on the loan. This is likely the most reliable source on reverse mortgage rates available. Although it’s important to keep in mind that these are just averages and HUD only provides data two months after the fact, this table should give you a good idea of what’s available in the Utah market.

Current Rates

Date Fixed Rate Adjustable Rate
2019-01-01 4.60% 4.85%
2019-02-01 4.67% 4.74%
2019-03-01 4.71% 4.64%
2019-04-01 4.65% 4.68%
2019-05-01 4.58% 4.50%
2019-06-01 4.44% 4.44%
2019-07-01 4.37% 4.20%
2019-08-01 4.35% 3.83%
2019-09-01 4.34% 4.00%
2019-10-01 4.58% 3.88%
2019-11-01 4.47% 3.92%
2019-12-01 4.30% 3.74%
2020-01-01 4.32% 3.73%
2020-02-01 4.37% 3.74%
2020-03-01 NA 3.68%
2020-04-01 3.92% 3.40%
2020-05-01 4.56% 3.05%
2020-06-01 3.98% 2.98%
2020-07-01 3.43% 2.93%
2020-08-01 3.48% 2.87%
2020-09-01 3.48% 2.79%
2020-10-01 3.37% 2.80%
2020-11-01 3.42% 2.75%
2020-12-01 3.41% 2.68%
2021-01-01 3.20% 2.63%
2021-02-01 3.31% 2.54%
2021-03-01 3.24% 2.43%
2021-04-01 3.50% 2.33%
2021-05-01 3.37% 2.28%
2021-06-01 3.31% 2.18%
2021-07-01 3.28% 2.15%
2021-08-01 3.38% 2.08%
2021-09-01 3.31% 2.10%
2021-10-01 3.36% 2.05%
2021-11-01 3.42% 2.07%

Historic Rates

Date Fixed Rate Adjustable Rate
2014-01-01 4.96% 2.43%
2014-02-01 5.01% 2.37%
2014-03-01 4.98% 2.39%
2014-04-01 5.00% 2.44%
2014-05-01 4.93% 2.43%
2014-06-01 4.99% 2.44%
2014-07-01 4.98% 2.50%
2014-08-01 4.97% 2.53%
2014-09-01 4.90% 2.61%
2014-10-01 4.95% 2.66%
2014-11-01 4.97% 2.64%
2014-12-01 4.92% 2.75%
2015-01-01 4.84% 2.72%
2015-02-01 4.88% 2.76%
2015-03-01 4.95% 2.86%
2015-04-01 4.82% 2.97%
2015-05-01 4.84% 3.12%
2015-06-01 4.91% 3.10%
2015-07-01 4.85% 3.09%
2015-08-01 4.91% 3.13%
2015-09-01 4.95% 3.13%
2015-10-01 4.90% 3.14%
2015-11-01 4.86% 3.24%
2015-12-01 4.87% 3.40%
2016-01-01 4.80% 3.41%
2016-02-01 4.89% 3.53%
2016-03-01 4.87% 3.62%
2016-04-01 4.85% 3.76%
2016-05-01 4.92% 3.97%
2016-06-01 4.89% 4.05%
2016-07-01 4.86% 3.94%
2016-08-01 4.85% 4.11%
2016-09-01 4.85% 4.44%
2016-10-01 4.81% 4.31%
2016-11-01 4.80% 4.51%
2016-12-01 4.89% 4.42%
2017-01-01 4.91% 4.46%
2017-02-01 4.90% 4.30%
2017-03-01 5.00% 4.44%
2017-04-01 4.98% 4.36%
2017-05-01 4.96% 4.33%
2017-06-01 4.98% 4.33%
2017-07-01 4.84% 4.35%
2017-08-01 4.92% 4.42%
2017-09-01 4.91% 4.42%
2017-10-01 5.00% 4.38%
2017-11-01 4.97% 4.53%
2017-12-01 4.92% 4.57%
2018-01-01 4.80% 4.53%
2018-02-01 4.67% 4.48%
2018-03-01 4.48% 4.40%
2018-04-01 4.66% 4.63%
2018-05-01 4.42% 4.71%
2018-06-01 4.42% 4.47%
2018-07-01 4.58% 4.67%
2018-08-01 4.43% 4.54%
2018-09-01 4.37% 4.59%
2018-10-01 4.45% 4.66%
2018-11-01 4.53% 4.69%
2018-12-01 4.46% 4.79%

Top Cities in Utah by Total HECM Loans Originated

Rank City Zip Total
1 SALT LAKE CITY 84121 3,039
2 SAINT GEORGE 84770 1,618
3 ST GEORGE 84770 1,156
4 SANDY 84093 1,064
5 WEST VALLEY CITY 84120 682
6 WEST JORDAN 84084 606
7 OGDEN 84403 597
8 WASHINGTON 84780 590
9 OREM 84057 493
10 SOUTH JORDAN 84095 472
11 BOUNTIFUL 84010 437
12 LAYTON 84041 429
13 TAYLORSVILLE 84111 412
14 MURRAY 84117 395
15 HURRICANE 84737 374
16 PROVO 84601 346
17 CEDAR CITY 84720 267
18 RIVERTON 84065 263
19 MIDVALE 84047 261
20 LEHI 84043 256
21 ROY 84067 219
22 IVINS 84738 216
23 MAGNA 84044 212
24 AMERICAN FORK 84003 192
25 DRAPER 84020 191
26 PLEASANT GROVE 84062 180
27 HOLLADAY 84117 176
28 TOOELE 84074 175
29 SPANISH FORK 84660 175
30 KAYSVILLE 84037 171

Department of Housing and Urban Development Offices

Salt Lake City Field Office

Department of Housing and Urban Development
125 South State Street
Suite 3001
Salt Lake City, Utah 84138

Phone: (801) 524-6070
Email: Customer Service
Fax: (801) 524-3439
TTY: (800) 877-8339 or dial 7-1-1 (Not available in all areas.)

Jurisdiction: State of Utah

Kelly Jorgensen, Field Office Director

Office Hours: Monday through Friday, 8:00 a.m. to 4:30 p.m.

Housing Counselors

UTAH STATE UNIVERSITY – FAMILY LIFE CENTER – HFC
493 N 700 E
Logan, Utah 84321-4231
Phone: 435-797-5426
E-mail: [email protected]
Website: www.usu.edu/fchd/community/housing/index.cfm

AAA FAIR CREDIT FOUNDATION
230 W 200 S Ste 3104
Salt Lake City, Utah 84101-3428
Phone: 801-483-0999
Fax: 801-364-8885
E-mail: [email protected]
Website: www.faircredit.org

Want to learn more? Click here to get free information about a reverse mortgage!