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Reverse Mortgage Borrower, 3 Money Saving Tips

TrafficSwarm member since January 2009

Have you decided to take a reverse mortgage, but think that the present economic situation is a bad time? Have you thought, that the downfall in the economy has spoiled the reverse mortgages, because the future looks uncertain?


Dont be like the typical error maker, who acts, when the news are good and is afraid to act, when the news are bad and the prices down. It is a sad thing to notice, that the news draw seniors to make the wrong conclusions. The reverse mortgage is like whatever financial product and the prices fluctuate following the demand in the market.


1. The Reverse Mortgage Market Is Soft, Which Is A Good News For All Seniors.


This softness means, that the demand is too low to keep the prices up. But is it a bad thing for a senior, who has decided to take a reverse mortgage? No, on the contrary now is the right time to act. Why to wait untill the demand will wake, the prices start to climb and the special offers disappear?


When a senior thinks, that a reverse mortgage loan is a longterm commitment, the low demand brings one big benefit and that is a possibility to get a good deal with low fixed rates. That means, that even when the economy will pick up it has no influence on the terms.


2. The Importance Of The Fixed Low Interest Rate.


The idea of the reverse mortgage loan is, that a senior will not pay back anything during the running time of the loan. That means that the interest rates become the biggest single cost component, because they will be added on the top of each other.


During the downfall in the economy the price of the loan, the interest rate, decreases significantly. This offers a great opportunity to get the loan with lower costs. When the interest rates are historically on the low level, it is wise to take a loan with the fixed interest rate. That guarantees, that it stays on the low level during the whole running time, which means big savings.


3. The Shopping Brings Extra Savings.


The power in the market varies between the buyers and sellers. When the economy is rising, the sellers have the power and they do not use the price to boost the sales. When the economy is down, the buyers have the power and the sellers try to sell using price and special offers to sell.


Today the economy is down and the financial news are bad. That means that the buyers have the power and that means, that they have to make the sellers, the reverse mortgage lenders, to fight to get an order from a senior. Today a senior, who follow the offers and ask bids from the lenders makes the best deals. An Internet is a great tool to do this.


To start the shopping a senior can ask recommendations from other seniors, relatives, friends and reverse mortgage experts. The initial list of potential lenders can be as long as 20 to 30 names. Now a senior sends the same information to all and asks offers. Then he picks maybe the best 5 to ask the last offer. Then he can contact the two best ones and to ask whether the second best would like to make it better.


The downfall in the economy is the best time to pick a good deal for the reverse mortgage loan. It does not matter if the house prices are down, which drops the maximum loan amount, because a senior can always increase the loan amount later, when the house prices have recovered.

Juhani Tontti, B.Sc., Marketing, Is An Independent Reverse Mortgage Lender To Save Money. Visit: Reverse Mortgages


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