To Wait or Not to Wait…Is that the Question?The Federal Reverse’s recent move to lower interest rate, and, hopefully, stimulate the recovering economy is creating a new window of opportunity for seniors interested in a
reverse mortgage. While this means less interest earned on savings account, and essentially using more of the prinicipal portion of your savings account more quickly, there is hope yet for those interested in a
reverse mortgage.In a recent
Reverse Focus news report released on June 24th, Shannon Hicks, Vice President of Product Development at Reverse Focus, Inc., warns of the dangers of waiting and not taking advantage of the lower interest rates. In a report by the
Boston Center for Retirement Research, investments and savings accounts only account for
10% of middle income Americans’ total wealth, demonstrating a retiree’s biggest asset is their home.
In a low interest rate, recovering housing economy, the consumer has more buying power while housing demand continues to raise. In addition, homeowners are able to pay off more of their mortgage each month and the home values for senior homeowners raise a well–a useful tool when applying for a reverse mortgage.To qualify for a
reverse mortgage, you must be 62 years of age and older, live in your primary residence and have enough equity in your home. The correlation between the expected interest rate and the amount of money you receive in a reverse mortgage are linked. Therefore, the
lower the expected interest rate (which currently hovers around 5.00%), the
more money you may qualify to receive granted you met the other reverse mortgage requirements. Once the expected rate is above 5.06%, the percentage of money your receive drops drastically.
However, it is crucial not to wait.If the expected interest rate increases, the amount of money a borrower qualifies for decreases. Not to mention, the amount of cash flow lost on monthly mortgage payments, which could have been eliminated if you would’ve applied for a reverse mortgage sooner. THE EXPECTED RATE IS RISING AND HAS BEEN ON THE RISE FOR A FEW WEEKS. PS Financial Services is a reverse mortgage specialist dedicated to finding the best lender for each senior homeowner. Give us a call at (888)845-6630 to determine if a reverse mortgage is right for you.