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Appendix L—Assumed Loan Periods for Computations of Total Annual Loan Cost Rates

(a) Required tables. In calculating the total annual loan cost rates in accordance with Appendix K of this part, creditors shall assume three loan periods, as determined by the following table.

(b) Loan periods. (1) Loan Period 1 is a two-year loan period.

(2) Loan Period 2 is the life expectancy in years of the youngest borrower to become obligated on the reverse mortgage loan, as shown in the U.S. Decennial Life Tables for 1979–1981 for females, rounded to the nearest whole year.

(3) Loan Period 3 is the life expectancy figure in Loan Period 3, multiplied by 1.4 and rounded to the nearest full year (life expectancy figures at .5 have been rounded up to 1).

(4) At the creditor's option, an additional period may be included, which is the life expectancy figure in Loan Period 2, multiplied by .5 and rounded to the nearest full year (life expectancy figures at .5 have been rounded up to 1).

Age of youngest
borrower
Loan period 1
(in years)
[Optional loan period
(in years)]
Loan period 2
(life expectancy) (in years)
Loan period 3
(in years)
622[11]2129
632[10]2028
642[10]1927
652[9]1825
662[9]1825
672[9]1724
682[8]1622
692[8]1622
702[8]1521
712[7]1420
722[7]1318
732[7]1318
742[6]1217
752[6]1217
762[6]1115
772[5]1014
782[5]1014
792[5]913
802[5]913
812[4]811
822[4]811
832[4]710
842[4]710
852[3]68
862[3]68
872[3]68
882[3]57
892[3]57
902[3]57
912[2]46
922[2]46
932[2]46
942[2]46
95 and over2[2]34

 

Official Interpretation

Appendix L—Assumed Loan Periods for Computations of Total Annual Loan Cost Rates

1. General. The life expectancy figures used in Appendix L are those found in the U.S. Decennial Life Tables for women, as rounded to the nearest whole year and as published by the U.S. Department of Health and Human Services. The figures contained in Appendix L must be used by creditors for all consumers (men and women). Appendix L will be revised periodically by the Bureau to incorporate revisions to the figures made in the Decennial Tables.

 

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