Senior Reverse Mortgage

Since the economic downturn in 2008, interest rates have hit record lows. On January 25th, the Federal Reserve released a statement telling the public that they expect to keep rates around zero percent through 2014. While this may not be great news for people trying to build their savings, it is fantastic news for borrowers.

Why the Low Rates?

As reported by the Federal Open Market Committee, the American economy has been “expanding moderately, notwithstanding some slowing in global growth.” If the economy is improving, consumers might be wondering why interest rates will not be rising. However, to many financial professionals, the Federal Reserve’s extension comes as no surprise. In fact, many predict that both mortgage and auto loan rates will drop even lower.

According to the Federal Reserve, high unemployment rates are primarily to thank for today’s low interest rates. The depressed housing market has also played an important role. While household spending is up and the economy seems to be recovering, the United States still has a long way to go. By keeping interest rates low, the Federal Reserve is hoping to encourage borrowing and further stimulate the economy.

What This Means for the Reverse Mortgage Industry

For seniors, the Federal Reserve’s announcement is a positive one. Seniors who are still considering a reverse mortgage will be able to take advantage of extremely low reverse mortgage rates through 2014. If rates decline even further, reverse mortgage rates might drop to their lowest yet.

Low reverse mortgage rates do two important things for seniors. Locking in a low rate will decrease the amount of interest a borrower will pay over the life of his or her loan. Since seniors will be paying less in interest, they will also get to enjoy larger payouts. This is a huge benefit to borrowers who want to make the most of their home equity.

To discover whether now is the time for a reverse mortgage, contact us at (877) 267-0274 to discuss your options with an experienced loan specialist.