Being Tied To The Government’s Credit Rating

Being Tied To The Government’s Credit Rating

When Sub Prime loans were first used, they were a very positive instrument for helping fill a need. There were people who did not have the credit score for a standard loan, so they were given loans with a slightly higher interest rate than the regular loan. It was both a punishment for not having paid all your bills on time, and insurance that the bank would still profit from the new line of business.

The day that balloon payments, and introductory rates came into the sub prime market, was the day that the Sub Prime loan went from a good instrument, to a bad one.

When seniors see the incredibly low rates that are currently being offered on reverse mortgages, the often think that they are in a “bait and switch” situation, just like the sub prime loans. Reverse mortgages are not introductory priced loans and they do not have balloon payments. Reverse mortgages are priced according to the government’s credit rating….the Treasury Bill. The interest rate on reverse mortgages is just one of the ways that they are being regulated by the government.

That is why reverse mortgages are an entitlement for senior citizens in this country and not just some loan that is available. Once you learn, you will understand the benefits of participating in the entitlement.

Bob

Bob@az62.com

www.az62.com

623-214-6663