Stock Market Running Seniors to Reverse Mortgage
It isn't a secret that that the stock market is down a solid 35% or more. I don't keep accurate tabs on it because I don't have money in the market.
My money is in real estate. Doesn't that make me smart? That's sarcasm, case you are wondering.
With the stock market down as far as it is I'm getting a ton of calls lately from seniors desirous of getting a reverse mortgage.
Now the question I'm asking them is, "what do you hope to accomplish with a reverse mortgage?"
Well, the first thing I need to do is step back and understand the stress they are under.
But the question of using a reverse mortgage as some sort of damn to the financial mess or financial safety net doesn't make sense. Not at this point, at least for the reasons at hand.
The majority of my recent phone calls want a reverse mortgage to act as an additional layer of security for them. After a 40% reduction in their saving one can relate, but one also has to ask if this is prudent.
I have serious questions about this logic. Other, more panicked or more aggressive potential clients (I'm not sure which) believe the market has seen its worst days are looking to plant reinvest their home equity into the market.
I have to admit I believe this second person is making a mistake. I mean, what is a good return anyway? 10%, maybe. Well, it will probably cost them over 6% to get the reverse mortgage.
The math doesn't work out very well, even if they get 10%. Less than a 4% return.
Look, the reverse mortgage is not the best investment strategy. Now, if you have a sure fire winner, I'd say go ahead and do it. But who has that. Last person I knew who had a sure fire winner went to jail for insider trading.
The best thing to do is to have glass of milk and cookie right now. Take a deep breath thereafter and sleep on it. Tomorrow, if you still want to get a reverse mortgage, call me.
My money is in real estate. Doesn't that make me smart? That's sarcasm, case you are wondering.
With the stock market down as far as it is I'm getting a ton of calls lately from seniors desirous of getting a reverse mortgage.
Now the question I'm asking them is, "what do you hope to accomplish with a reverse mortgage?"
Well, the first thing I need to do is step back and understand the stress they are under.
But the question of using a reverse mortgage as some sort of damn to the financial mess or financial safety net doesn't make sense. Not at this point, at least for the reasons at hand.
The majority of my recent phone calls want a reverse mortgage to act as an additional layer of security for them. After a 40% reduction in their saving one can relate, but one also has to ask if this is prudent.
I have serious questions about this logic. Other, more panicked or more aggressive potential clients (I'm not sure which) believe the market has seen its worst days are looking to plant reinvest their home equity into the market.
I have to admit I believe this second person is making a mistake. I mean, what is a good return anyway? 10%, maybe. Well, it will probably cost them over 6% to get the reverse mortgage.
The math doesn't work out very well, even if they get 10%. Less than a 4% return.
Look, the reverse mortgage is not the best investment strategy. Now, if you have a sure fire winner, I'd say go ahead and do it. But who has that. Last person I knew who had a sure fire winner went to jail for insider trading.
The best thing to do is to have glass of milk and cookie right now. Take a deep breath thereafter and sleep on it. Tomorrow, if you still want to get a reverse mortgage, call me.
About the Author:
You may consider using a Texas reverse mortgage to invest. Learn first and read this report. Also, get the nitty gritty about the reverse mortgage, click here.
posted by Credit Counseling at
5:52 PM
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