Citing the need to encourage maximum employment and create stable prices Jerome Powell just announced the Federal Reserve will be lowering the Federal Funds overnight rate by 50 basis points. He said they will make decisions going forward about future rate cuts based on current needs and the employment rate, not based on any preset plan.
This lowering of the fed rates will have a ripple effect on home loans pushing those rates down. In recent years interest rates have climbed from around 3.5% to 7.5%; this has had a slowing effect on business growth and on the jobs market. The last few years’ rate hikes have lowered the cash payouts and qualifications on reverse mortgage as well as increased costs to retirees looking to access their home equity to cover the higher costs we have all seen last 3 1/2 years. Gas and grocery prices have almost doubled and insurance costs have skyrocketed as well. This is welcome relief for seniors who haven’t been able to qualify for a reverse mortgage because they owed too much on their homes.
These lower rates will now open the door to seniors that already have a reverse mortgage to possibly be able to refinance into a new reverse mortgage and qualify for a higher monthly check or more money in a lump sum payout or Line of Credit. The reverse mortgage rates are based on the 10 year treasury note and as these rates drop, the cash available to seniors increases.
If you know someone that has been trying to qualify for a reverse mortgage now may be the time they can finally do it; with home values at all time highs and rates on their way down seniors will qualify for much more money than before.
If you would like to look into accessing your home equity you may contact Robert Krepps [email protected] or toll-free at 877-567-7476.
Robert Krepps, NMLS #255191, at HighTechLending Inc. HighTechLending Inc, NMLS # 7147, is an Equal Housing Lender. Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act.
