Five Reasons To Get A Reverse Mortgage When Rates Are High

Considering a reverse mortgage? Learn the five reasons why you should secure one now, even during high rates. Get reliable advice from our experienced team of professionals at Reverse Mortgage Colorado and make sure your financial future is secure.
Five Reasons To Get A Reverse Mortgage When Rates Are High

A reverse mortgage is a loan that is specifically designed for people who are 62 and over that allows you to convert a portion of the value of your home into money that you can use.  The FHA insured reverse mortgage program, called the Home Equity Conversion Mortgage (HECM) is by far the most popular.

There are a lot of benefits to this program but it is very interest rate sensitive.  The percentage of the equity in your home that is available from the HECM depends upon three factors:

  • The age of the youngest spouse/homeowner
  • The value of the home
  • The interest rate

Interest rate is the variable that changes most often.  Generally speaking, the lower the interest rate, the more money you can receive.  Conversely, the higher the interest rate, the less money you can receive.

Interest rates are currently on the high side.  So why should you get a reverse mortgage now?  Here are five solid reasons:

1. Stop paying your mortgage payment

You must continue to pay your property taxes and homeowners insurance when you have a reverse mortgage, but you are not required to ever make a principal and interest payment like you do with your existing mortgage.  Also, if it takes another 12 -18 months for rates to drop back down into the 5% range, you have saved the principal and interest payment over all that time by paying it off with a reverse mortgage instead of waiting for the perfect time. For example, if your principal and interest payment is just $800 per month and you wait 12 months to get a reverse mortgage, you would have paid an additional $9,600 waiting for the rate to drop to do a reverse mortgage.

2. The line of credit grows at 0.5% above the rate you are charged on the loan balance

If you have a very small mortgage balance or no mortgage at all, you will most likely have a substantial amount of money left over from the reverse mortgage.  You can leave this money in a line of credit that increases at a rate of a half percentage point higher than the rate you are charged on the loan balance.  For example, if you have a loan balance and are charged 7.50%, any additional funds left over in the line of credit are growing at 8.00%.  This amount will change as the interest rate changes.

3. Consolidate high interest debt

Unfortunately, with the inflation we’ve seen over the past year, a lot of older households have acquired a lot of credit card debt.  That debt is on adjustable rates and as the rates increase over time, so have the payments.  Since reverse mortgages have no required minimum payments* they work great as consolidation loans.  You can use the funds from a reverse mortgage to pay off high interest loans saving yourself money every month.  

4. Lock in your home equity

Home values are still high, but as we know, there is no guarantee they will stay there.  I don’t know which way home values will go in the future, but you can lock in access to a portion of your equity now.  Even if you don’t need it at this moment, the line of credit growth rate discussed in point #2 explains the benefit to this strategy.  Even if values do drop, your line of credit will continue to grow.  The Home Equity Conversion Mortgage is 100% non-recourse, meaning that even if your loan balance grows to exceed the value of the home, the lender can never come back on you, your estate or your heirs to collect a loss.

5. The rates may not drop, but if they do, you can refinance – either way, you win

We all are planning on interest rates to drop soon, but what if it takes longer than we think or they don’t drop as much as we think?  If you do a reverse mortgage now, you can save money by not paying a mortgage payment, and take advantage of the higher rate with the line of credit growth.  However, if they do drop, you may be able to refinance the reverse mortgage with a new reverse mortgage and gain access to additional equity at that time.  Also, the closing costs are much less when you refinance, compared to the original reverse mortgage.

A reverse mortgage can be an excellent program as long as you understand the pros and cons.   

Please feel free to contact me with any questions.

Bruce E. Simmons, CRMP, CLTC
Reverse Mortgage Manager
American Liberty Mortgage, Inc.
1932 W 33rd Ave
Denver, CO 80211
Direct:  303-467-7821

www.reversemortgageradio.net

*Homeowners still own the home and must continue to pay their own property taxes and homeowners insurance.  They must also maintain the home, keep their name on title and occupy the home as their primary residence.

Picture of Bruce Simmons

Bruce Simmons

I absolutely love what I do - working with senior homeowners to help them live a more comfortable, flexible and secure retirement. I have the absolute best customers in the world, and even though I worked in the forward mortgage business for a number of years, I could never go back to doing conventional loans. I'm a 100% reverse mortgage specialist.

5.0

My wife and I are retired and had a mortgage that was quite high. We contacted Bruce regarding a Reverse Mortgage and were pleased with his knowledge and experience. He made the whole process very easy and explained everything along the way. Since then, I have had a couple of questions and contacted him regarding the RM. Bruce has always been very responsive and returned our calls within minutes. We couldn't be happier having used Bruce for the Reverse Mortgage and highly recommend him.

Bruce has been serving my interest over and above what one might expect during the whole process of handling my reverse mortgage dating back to 2010 and continues to be available at present whenever a question may arise. He is one of the most reliable, trustworthy and knowledgeable experts regarding reverse mortgages that I have had the privilege to do business with! I would highly recommend Bruce to anyone who is considering a reverse mortgage. Thank you Bruce!

I met Bruce from a referral who just love what he did for them on their Reverse Mortgage, So I contacted Bruce and told him my story and he came up with a great Reverse Mortgage for me and my needs and now I am living good and not worrying about Finances anymore. He had it done in a timely manner. If you are looking for the MAN to help you get the best Reverse Mortgage you need to call him and hope you let him help you.

Bruce is one of the most professional, knowledgeable and efficient experts I have worked ŵith ever in any field. He is fast to answer and always ready to help...and he's a great guy!

Gerald Cook
Gerald Cook
5.0

Bruce did our original reverse mortgage and has also refinanced it twice. He works hard to get the best deal possible while making it as easy for us as possible. When our first refinance received a low initial appraisal, Bruce helped the appraiser find better information and increase the appraised value. He's the best.

I was hesitate about getting a reverse mortgage until Bruce Simons put my mind at rest. He is easy to work with, extremely knowledgeable and efficient. Things get done and he will make sure that you understand every part of the process. I interviewed several other people and he was hands down.....The only choice.

Doing a Reverse Mortgage is a major decision, when working with Bruce he came out personally to go over every thing in detail, there was no pressure to finalize the transaction, I had even put the loan on hold for awhile even though I had locked in my rate, I had called Bruce off and on for a few weeks to ask questions that I had concerns about and he was always available to talk to me. In the end it gave me time to feel comfortable about my decision to move forward with the Reverse. Bruce was very pleasant to work with and would certainly recommend Bruce if you are going to consider a Reverse Mortgage.

Bruce Simmons at American Liberty is one of the best in the reverse mortgage industry. I have known and worked with him for years and he always does a great job. You are in good hands with Bruce and know that he will take good care of you or your loved ones every step of the way.

Best thing I ever did! Bruce Simmons at American Liberty Mortgage is the best. He is always there to answer your questions, and can easily explain the whole idea of a Reverse Mortgage. He takes the time and goes through the entire process with you. It worked out so well for me. Thank You Bruce!

We had researched Reverse Mortgages for 5 years and after hearing about Bruce Simmons and meeting with him, we finally decided to move forward with the Reverse Morgage. It has been over a year now and we are still very pleased with our decision. We think Bruce is very professional, knowledgeable and honest. Thank you, Bruce, for all your help.

I first met Bruce Simmons 2017. I found him on the internet. I was looking for someone local. I called him and explained I was only looking into doing a reverse mortgage, so I did not want him to think this was something I was ready to do. Bruce was friendly, very open about the basics of a reverse mortgage. Bruce came to my home and presented the figures and other details that he could offer. The first thing that impressed me was this was not a hard sell, more of a informational meeting. He was very open about all of the details, and answered my questions without hesitation. What really was evident was he was establishing a relationship with me, and I realized he knew I would not take the loan at that time. There was not enough equity in my home, and I would have to bring money to the table. Although I was not ready to do a loan, Bruce assured me he is always available for questions. Four years later, I finally did do a reverse mortgage, and I couldn't be happier with having done it. I have done away with a mortgage payment which allows me to fund my retirement account with that mortgage payment. We did some much needed landscaping with our cash out transaction, and will move on to improvements inside of the house. My reverse mortgage has a line of credit, and I feel sense security knowing it is there if I need it. Bruce explained that a reverse mortgage is not for everyone, but I feel certain that he paved the way for a strategy that worked for me. I will definitely do a refinance when the time is right. I will check in with Bruce to be sure what the benefits are when I do it again.

I have worked with Bruce Simmons for 15 years. Bruce is one of the best in the industry. He is extremely knowledgeable, kinds and detailed in what he does. His clients love working with him and trust him to help them with their Reverse Mortgage loans. I would recommend Bruce to anyone I know that is thinking about or wanting to do a Reverse Mortgage. He will always take very good care of the customers and make sure their needs are met! Class act and one of the best in the industry by far!

Free Reverse Mortgage Guide

Unlock the secrets to a more secure retirement with our exclusive Consumer Guide! Discover if a reverse mortgage is your golden ticket to financial freedom and comfort in your later years. 

Reverse Mortgage Guide - Popup

Would You Like To Chat By Phone Or Zoom?

Reverse Mortgage Guide

Reverse Mortgage Guide

Unlock the secrets to a more secure retirement with our exclusive Consumer Guide! Discover if a reverse mortgage is your golden ticket to financial freedom and comfort in your later years. 

Reverse Mortgage Guide - Popup
John Addante
John Addante

Left us a 5 star review

My wife and I are retired and had a mortgage that was quite high. We contacted Bruce regarding a Reverse Mortgage and were pleased with his knowledge and experience. He made the whole process very easy and explained everything along the way. Since then, I have had a couple of questions and contacted him regarding the RM. Bruce has always been very responsive and returned our calls within minutes. We couldn't be happier having used Bruce for the Reverse Mortgage and highly recommend him.

Bruce has been serving my interest over and above what one might expect during the whole process of handling my reverse mortgage dating back to 2010 and continues to be available at present whenever a question may arise. He is one of the most reliable, trustworthy and knowledgeable experts regarding reverse mortgages that I have had the privilege to do business with! I would highly recommend Bruce to anyone who is considering a reverse mortgage. Thank you Bruce!

I met Bruce from a referral who just love what he did for them on their Reverse Mortgage, So I contacted Bruce and told him my story and he came up with a great Reverse Mortgage for me and my needs and now I am living good and not worrying about Finances anymore. He had it done in a timely manner. If you are looking for the MAN to help you get the best Reverse Mortgage you need to call him and hope you let him help you.

Bruce is one of the most professional, knowledgeable and efficient experts I have worked ŵith ever in any field. He is fast to answer and always ready to help...and he's a great guy!

I was hesitate about getting a reverse mortgage until Bruce Simons put my mind at rest. He is easy to work with, extremely knowledgeable and efficient. Things get done and he will make sure that you understand every part of the process. I interviewed several other people and he was hands down.....The only choice.

Doing a Reverse Mortgage is a major decision, when working with Bruce he came out personally to go over every thing in detail, there was no pressure to finalize the transaction, I had even put the loan on hold for awhile even though I had locked in my rate, I had called Bruce off and on for a few weeks to ask questions that I had concerns about and he was always available to talk to me. In the end it gave me time to feel comfortable about my decision to move forward with the Reverse. Bruce was very pleasant to work with and would certainly recommend Bruce if you are going to consider a Reverse Mortgage.

Bruce Simmons at American Liberty is one of the best in the reverse mortgage industry. I have known and worked with him for years and he always does a great job. You are in good hands with Bruce and know that he will take good care of you or your loved ones every step of the way.

Best thing I ever did! Bruce Simmons at American Liberty Mortgage is the best. He is always there to answer your questions, and can easily explain the whole idea of a Reverse Mortgage. He takes the time and goes through the entire process with you. It worked out so well for me. Thank You Bruce!

We had researched Reverse Mortgages for 5 years and after hearing about Bruce Simmons and meeting with him, we finally decided to move forward with the Reverse Morgage. It has been over a year now and we are still very pleased with our decision. We think Bruce is very professional, knowledgeable and honest. Thank you, Bruce, for all your help.

I first met Bruce Simmons 2017. I found him on the internet. I was looking for someone local. I called him and explained I was only looking into doing a reverse mortgage, so I did not want him to think this was something I was ready to do. Bruce was friendly, very open about the basics of a reverse mortgage. Bruce came to my home and presented the figures and other details that he could offer. The first thing that impressed me was this was not a hard sell, more of a informational meeting. He was very open about all of the details, and answered my questions without hesitation. What really was evident was he was establishing a relationship with me, and I realized he knew I would not take the loan at that time. There was not enough equity in my home, and I would have to bring money to the table. Although I was not ready to do a loan, Bruce assured me he is always available for questions. Four years later, I finally did do a reverse mortgage, and I couldn't be happier with having done it. I have done away with a mortgage payment which allows me to fund my retirement account with that mortgage payment. We did some much needed landscaping with our cash out transaction, and will move on to improvements inside of the house. My reverse mortgage has a line of credit, and I feel sense security knowing it is there if I need it. Bruce explained that a reverse mortgage is not for everyone, but I feel certain that he paved the way for a strategy that worked for me. I will definitely do a refinance when the time is right. I will check in with Bruce to be sure what the benefits are when I do it again.

I have worked with Bruce Simmons for 15 years. Bruce is one of the best in the industry. He is extremely knowledgeable, kinds and detailed in what he does. His clients love working with him and trust him to help them with their Reverse Mortgage loans. I would recommend Bruce to anyone I know that is thinking about or wanting to do a Reverse Mortgage. He will always take very good care of the customers and make sure their needs are met! Class act and one of the best in the industry by far!