I don't suppose I need to tell you that we've lost somewhere around thirty five percent in value in the stock market in one year. Some seniors are now picking up their phone and calling me because of this.
These folks are attempting to use a reverse mortgage to access their home's equity. There are some excellent reasons to use a reverse mortgage. Then again, there are some excellent reasons not to.
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.
The longer one holds a reverse mortgage, or in a practical sense, stays in the home the cheaper the mortgage becomes on an annualized basis.
As some of the these phone calls are losing tons of their hard earned money they are calling to to pull money out of their equity to reinvest in other investments to recoup their losses.
What is catching a portion of their attention is the fact that interest rates are just unbelievably low. It makes the cost of that money very attractive.
For the week of January 6 to January 12 the rate on the adjustable is well below 4%. If we look at this loan over the last 15 years, it's average is around 6%.
In my dealings with people, although I do not have fiduciary responsibility, I have to point out that they best be getting a better return on whatever else they are getting involved in than the average.
In my conversations with the borrower I always discuss the fact that rates will not continue at their current position indefinately. They will go back up.
Most people expect rates to be low for a good while with all the pressures from the powers that be doing whatever they can to keep them down.
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. - 15224
These folks are attempting to use a reverse mortgage to access their home's equity. There are some excellent reasons to use a reverse mortgage. Then again, there are some excellent reasons not to.
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.
The longer one holds a reverse mortgage, or in a practical sense, stays in the home the cheaper the mortgage becomes on an annualized basis.
As some of the these phone calls are losing tons of their hard earned money they are calling to to pull money out of their equity to reinvest in other investments to recoup their losses.
What is catching a portion of their attention is the fact that interest rates are just unbelievably low. It makes the cost of that money very attractive.
For the week of January 6 to January 12 the rate on the adjustable is well below 4%. If we look at this loan over the last 15 years, it's average is around 6%.
In my dealings with people, although I do not have fiduciary responsibility, I have to point out that they best be getting a better return on whatever else they are getting involved in than the average.
In my conversations with the borrower I always discuss the fact that rates will not continue at their current position indefinately. They will go back up.
Most people expect rates to be low for a good while with all the pressures from the powers that be doing whatever they can to keep them down.
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. - 15224
