Many Americans say they are unsure what the rate on their mortgage is, according to a new study commissioned by Bankrate.
But experts in the reverse mortgage space say often the reverse mortgage borrower is a little more tapped in than the average forward mortgage borrower — especially those taking out the loan as a line of credit.
About 35% of the survey respondents who have a forward mortgage say they are not very confident they know what their mortgage rate is, according to results of Bankrate’s Money Pulse survey for February.
“Reverse mortgage borrowers may not be aware of it off the top of their head, but are aware of what is it by referring to the monthly statements they receive,” Beth Paterson, CRMP, executive vice president of Reverse Mortgages SIDAC, tells RMD. “After the loan has closed most may not care about the interest rate, although those with the line of credit may pay more attention because the line of credit growth rate is based on the interest rate of the loan.”
While 65% of forward mortgage borrowers said they are confident they know their mortgage rates, mortgage advisors tell Bankrate that percentage is likely lower based on experiences with their clients.
“As consumers, once we get the mortgage, we sweep the rate under the rug and we don’t worry about it,” Ed Conarchy, a mortgage adviser for Cherry Creek Mortgage Co. in Gurnee, Ill., tells Bankrate. “So, we don’t look at rebalancing or refinancing opportunities.”
Access results from the Bankrate survey here.
Written by Cassandra Dowell