Interest Only Loans

Lately, I have been receiving more phone calls from seniors who have an interest only adjustable rate mortgage. For one reason or another, they believed that this was the best solution for them at the time, which it might have been. However, in today’s climate of increased interest rates, they are paying much more on their monthly payment, which puts pressure on their month to month finances. What once was a $600-$700 monthly payment is now a $900+ monthly payment. On a fixed income, this could be disastrous.

Though the reverse mortgage solution may not be the appropriate tool for every person in this situation, it certainly is one that makes sense for many. If the client were to simply payoff their existing mortgage with a reverse mortgage, they would no longer be required to make monthly payments. As they stand now, their monthly payment is simply going straight down the toilet. It is like paying rent . . . . .  no financial long term improvement. However, with a reverse mortgage and by saving a portion of their monthly payment, it may make sense to work with a financial advisor and put to work the money that would have been used for their monthly payment, to actually grow their money, rather than to throw it away in interest only payments.

In these situations it is always my encouragement to clients to work with a financial advisor that understands the financial condition of the client and is able to provide integrity based solutions to help seniors to meet their financial goals.

Explore posts in the same categories: Real Life Stories, Reverse Mortgage Details

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