RTC Mortgage Blog

Rate Update & Reverse Mortgage Benefits

February 6th, 2017 8:24 AM by Richard T. Cirelli

An Update on Rates:

Now that the initital post-election shock is over, what are rates doing?  You'll recall that we had an immediate .75% rise in mortgage rates following the presidential election.  Optimism over the expectation of a stronger Trump-led economy, higher inflation, the assumption that the Fed may raise the Federal Funds Rate three times in 2017 and a super-strong positive reaction in the stock market all led to the rise.

But, as with most news events, the initial reaction was an over-reaction and the markets seem to be settling down.  Mortgage rates have come down about .25% and the market seems to have adjusted to what will probably be a mortgage rate range in the low 4% area for the next few months.

Here's a look at the trend of rates for the past 12 months.


Fannie Mae's chief economist, Doug Duncan, says that rising interest rates will not stop home prices from increasing.  Duncan claims that as long a income is growing, home prices will grow, irrespective of interest rates.

Home-Buying Retirees Shouldn't Overlook Reverse Mortgages

Buying a new home with a reverse mortgage is an often overlooked strategy by retirees who could potentially benefit from borrowing against their home equity instead of raiding their savings to cover the purchase price with a traditional mortgage, according to a recent article from U.S. News & World Report.

Many consumers, and even real estate agents, are unaware of the program or describe reverse mortgages as being useful only for those who cannot get a regular mortgage on thier own.  For retirees who want to remain homeowners, but not in thier current homes, the article notes that a Home Equity Conversion Mortgage, i.e., Reverse Mortgage, may help ease the financial pain of the purchase.

I've been originating Reverse Mortgages for 12 years now.  I've seen lots fo changes in the program, particularly in recent years, and the most recent changes have been to the benefit of the borrower. Financial advisors have embraced the product as an excellent financial planning tool now. Please give me a call to learn more.


Posted in:General and tagged: Reverse Mortgage
Posted by Richard T. Cirelli on February 6th, 2017 8:24 AM



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