Wall Street Journal: Hold Off on Getting a Reverse Mortgage
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The rising tide of interest in [tag]reverse mortgages[/tag] was the lead story in the Personal Journal Section of Wednesday’s (12/27/06) [tag]Wall Street Journal[/tag]. Much of the article deals with changes afoot in the reverse [tag]mortgage industry[/tag] such as:
- the influx of new players into the reverse mortage industry such as [tag]Bank of America[/tag] and [tag]Countrywide[/tag] Financial Corp. that will benefit consumers by pressuring costs downward and intrducing new innovations into the reverse mortgage marketplace;
- efforts by [tag]HUD/FHA[/tag] to bring down mortgage insurance premium costs. (We’ve previously noted that the current premium structure is a money-maker for the federal government.)
- a move to have a single national loan limit (instead of the present county-based limits) for the HECM program which could mean larger potential loans for many; and
- Ginnnie Mae’s initiative to securitize reverse mortgages which should help lower interest rates.
According to Ken Scholen of the [tag]AARP Foundation[/tag], who is quoted in the article, potential reverse mortgage borrowers should hold off until these forces play out:
“Lots of forces are at play right now that are working to bring costs down for consumers…If you’re not facing a really urgent need for cash, the smartest thing you can do is wait.”
Seems to be be prudent advice. The reverse mortgage market is hot right now but it’s likely to get even hotter with more competition and better deals coming your way. If you can afford to wait a few months, it may be worth your while.
Social tagging: Reverse Mortgage News > Reverse Mortgage TipsA Few More Related Articles of Interest:
January 14th, 2007 at 7:16 pm
[…] HECM 100: A Sign of Things to Come? Earlier this month we reported on a Wall Street Journal piece that recommended holding off on a getting a reverse mortgage because of changes in the works that could benefit consumers. The first of these changes came last week last week with the announcement by BNY Mortgage Company (BNYMC) of their new HECM 100 reverse mortgage: HECM 100 is a federally insured HECM loan that offers lower interest rates than a traditional HECM, saving borrowers significantly in costs over the life of the loan while giving them immediate access to more cash. […]