Reverse Mortgage Proceeds Used for Investment
It comes as no revelation that the market is down some 33 percent since this time last year. Of course lots over 62ers have their money here and many are beginning to call me on the phone.
They are looking to get a reverse mortgage. Of course the planets have to match up to their particular situation for me to entertain this with them.
What I like to see, first and foremost, in my potential customers is the attitude that they will be in that house until death do the two part. The reason is the closing costs make getting a reverse mortgage pretty expensive in the short run.
Generally, we determine the cost of the loan on an annualized basis. The longer a borrower lives in the home the cheaper the loan actually becomes over time.
It's pretty clear to see a certain level of panic as some of these folks have lost much of their all important nest egg. Now they want money to reinvest.
One of the teasers the reverse mortgage has for these folks right now is very low interest rates on the adjustable rate option.
Currently it's below 4% which makes this a fairly attractive option. Of course this rate is subject to change but its fifteen year average is right around 6%.
I'm in the business of getting people reverse mortgages and feel it is my duty to help my customers make good choices. One thing they should be doing is to make sure their next investment returns more than it costs.
They cannot expect the low rates to hold up forever and must consider these rates driving up to their average level.
Many in the marketplace are taking the position that rates will be low for some time with so much pressure to keep them low.
The powers that really want to keep rates low are the major companies. The want to be able to borrow at low interest rates. Do they shape policy? Of course.
We'll have to see. My concern for some of these people is that some of these folks are not taking into consideration to true cost of getting this money to make their investments.
Whichever investment the borrowers choose should have very good returns to not only beat the interest rate on the money, but the cost of getting the reverse mortgage in the first place.
They are looking to get a reverse mortgage. Of course the planets have to match up to their particular situation for me to entertain this with them.
What I like to see, first and foremost, in my potential customers is the attitude that they will be in that house until death do the two part. The reason is the closing costs make getting a reverse mortgage pretty expensive in the short run.
Generally, we determine the cost of the loan on an annualized basis. The longer a borrower lives in the home the cheaper the loan actually becomes over time.
It's pretty clear to see a certain level of panic as some of these folks have lost much of their all important nest egg. Now they want money to reinvest.
One of the teasers the reverse mortgage has for these folks right now is very low interest rates on the adjustable rate option.
Currently it's below 4% which makes this a fairly attractive option. Of course this rate is subject to change but its fifteen year average is right around 6%.
I'm in the business of getting people reverse mortgages and feel it is my duty to help my customers make good choices. One thing they should be doing is to make sure their next investment returns more than it costs.
They cannot expect the low rates to hold up forever and must consider these rates driving up to their average level.
Many in the marketplace are taking the position that rates will be low for some time with so much pressure to keep them low.
The powers that really want to keep rates low are the major companies. The want to be able to borrow at low interest rates. Do they shape policy? Of course.
We'll have to see. My concern for some of these people is that some of these folks are not taking into consideration to true cost of getting this money to make their investments.
Whichever investment the borrowers choose should have very good returns to not only beat the interest rate on the money, but the cost of getting the reverse mortgage in the first place.
posted by Credit Counseling at
10:58 PM
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