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.
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
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.
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%.
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.
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.
I have no doubt rates will be down for some time, but it I have to wonder how much some of these borrowers are thinking through the costs as opposed to the benefits.
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
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.
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%.
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.
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.
I have no doubt rates will be down for some time, but it I have to wonder how much some of these borrowers are thinking through the costs as opposed to the benefits.
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.
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