Low Interest Rates hurt Savers but Help Reverse Mortgage Borrowers
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Why bad news for savers is good news for potential reverse mortgage borrowers. It’s a catch 22 for many retirees. As the Federal Reserve sought to boost the economy lowering interest rates their interest on savings slowed substantially. These retirees will begin to consume the principal more quickly as interest earned dwindles.The Boston Center for Retirement Research says there is a sliver lining.
With HUD’s lowering of the expected rate from 5.5% to 5.0% in 2010 we have smaller window of opportunity for borrowers who may choose to wait.