Stocks Spiraling Sending Seniors Screaming to Reverse Mortgage
It isn't a secret that that the stock market is down a solid 35% or more. I don't keep accurate tabs on it because I don't have money in the market.
Being in real estate I have kept most of my investments safely their, so you know I'm okay. Just kidding, I'm down even more.
Being a reverse mortgage loan officer you can imagine a bunch of older folks are calling me lately inquiring about the reverse mortgage as some sort of stopgap.
Now the question I'm asking them is, "what do you hope to accomplish with a reverse mortgage?"
Well, the first thing I need to do is step back and understand the stress they are under.
It doesn't make a whole lot of sense to me. I mean they already own the equity to the home. It's there's. What they perceive a reverse mortgage will do for them is convoluded.
The majority of my recent phone calls want a reverse mortgage to act as an additional layer of security for them. After a 40% reduction in their saving one can relate, but one also has to ask if this is prudent.
I don't think so. Some are telling me they want to invest the line of credit back in the market. They are citing the Warren Buffet line, "When people get greedy I get scared. When people get scared, I get greedy."
I don't really agree with this person either. They, more than likely will be charged 6% on the money the take out (plus closing costs). And the average can't be higher than 10%.
The math doesn't work out very well, even if they get 10%. Less than a 4% return.
With the math working out the way it does it makes it hard to use a reverse mortgage for investment purposes unless you know something that is borderline illegal to invest in without being accused of an SEC violation.
Please relax a bit with this shakeup in the market. Your equity in the home is important. Use it when you need it. Cooler heads prevail in times like these.
Being in real estate I have kept most of my investments safely their, so you know I'm okay. Just kidding, I'm down even more.
Being a reverse mortgage loan officer you can imagine a bunch of older folks are calling me lately inquiring about the reverse mortgage as some sort of stopgap.
Now the question I'm asking them is, "what do you hope to accomplish with a reverse mortgage?"
Well, the first thing I need to do is step back and understand the stress they are under.
It doesn't make a whole lot of sense to me. I mean they already own the equity to the home. It's there's. What they perceive a reverse mortgage will do for them is convoluded.
The majority of my recent phone calls want a reverse mortgage to act as an additional layer of security for them. After a 40% reduction in their saving one can relate, but one also has to ask if this is prudent.
I don't think so. Some are telling me they want to invest the line of credit back in the market. They are citing the Warren Buffet line, "When people get greedy I get scared. When people get scared, I get greedy."
I don't really agree with this person either. They, more than likely will be charged 6% on the money the take out (plus closing costs). And the average can't be higher than 10%.
The math doesn't work out very well, even if they get 10%. Less than a 4% return.
With the math working out the way it does it makes it hard to use a reverse mortgage for investment purposes unless you know something that is borderline illegal to invest in without being accused of an SEC violation.
Please relax a bit with this shakeup in the market. Your equity in the home is important. Use it when you need it. Cooler heads prevail in times like these.
About the Author:
You may consider using a Texas reverse mortgage to invest. Learn first and please read this guide. Also, get the nitty gritty about the reverse mortgage, click here.
posted by Credit Counseling at
5:58 PM
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