It's no secret that the stock market is down some 30% over the last 12 months. With so many seniors with money in the market I'm starting to get a bunch of calls from a subset of this group.
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.
Most importantly they must have a desire to stay in their home for an extended period of time. This is vital because the cost to get a reverse mortgage is not conducive for a short term mortgage
As the borrower stays in the home for longer periods the less pricy the loan becomes as we determine the cost of money on an annual percentage.
What some of these folks are wanting is to use proceeds to invest either back in the market or into other investments outside the market.
That which is really palatable now is that rates are so low. In particlular the adjustable rate, with a line of credit option, is quity low.
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%.
As a loan officer I'm not required to represent my customer's best interests. However, as an ethical person I do my best to discuss the costs as opposed to the return the customer will receive by investing reverse mortgage money.
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.
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.
The investment best have a pretty good return because it isn't just the rate but the cost of getting the reverse mortgage must be factored in as well.
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.
Most importantly they must have a desire to stay in their home for an extended period of time. This is vital because the cost to get a reverse mortgage is not conducive for a short term mortgage
As the borrower stays in the home for longer periods the less pricy the loan becomes as we determine the cost of money on an annual percentage.
What some of these folks are wanting is to use proceeds to invest either back in the market or into other investments outside the market.
That which is really palatable now is that rates are so low. In particlular the adjustable rate, with a line of credit option, is quity low.
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%.
As a loan officer I'm not required to represent my customer's best interests. However, as an ethical person I do my best to discuss the costs as opposed to the return the customer will receive by investing reverse mortgage money.
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.
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.
The investment best have a pretty good return because it isn't just the rate but the cost of getting the reverse mortgage must be factored in as well.
0 comments:
Post a Comment