You read the title correctly! If you have been on the fence about getting a reverse mortgage now is the time to get serious about it.
Why would you possibly trade in a regular 30 year fixed loan at say 3% or even 4% for a higher interest rate Reverse Mortgage? The straight answer is that you will build equity faster by making a payment on a reverse mortgage than you will by making a payment on a regular mortgage.
While payments are not required on a reverse mortgage, there are times in the economic cycle when there can be a HUGE benefit by doing it. A high interest rate environment is one of those times.
Take for example a person [over 62 years old] who has a principal and interest (P&I) payment of $1500/mo on a 30 year fixed rate mortgage, on their primary residence. Very little equity is built in the first 10 years of a 30 year fixed rate mortgage. As a matter of fact if you look at a 30 year fixed rate amortization schedule, it takes more than 15 years for half of a P&I payment to even go towards equity!
What if you were making that same $1500/mo payment into a reverse mortgage? Would it surprise you to know that 100% of that payment would go toward equity? Not only is that the case but the equity you are freeing up is also growing at an annual rate [currently] of over 7%, compounded monthly.
The FHA HECM has been around since the 1980’s and has come a long way since then! Not only has our legislators improved homeowner protections over the last 40 years, they have designed the program so that month after month, year after year a homeowner can tap into more and more of their equity.
If you are capable of making a mortgage payment and want to position your financial future with more available tax free income, you need to check out the reverse mortgage today!
Don’t forget I present on the reverse mortgage about every 4 to 6 weeks. Our next Reverse Mortgage Lunch & Learn is April 11, 2023 at The Center (formerly The Adult Center) at 1280 E Rosser Rd in Prescott. At this lunch I crush myths about the reverse mortgage and show you how this program has come to be an investment account similar to any other retirement account you may have in your portfolio. Not only do homeowners benefit from this information so do Financial Advisors, CPA’s, Estate Planners and Fiduciaries.
To register for the FREE lunch & learn go to: arizonareversemortgages.net/events
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