A Guide to Selecting the Best Reverse Mortgage Lender

Money from a reverse mortgage

This article, which is a guide to selecting the best reverse mortgage lender, is an excellent asset to ensure the best financial decisions are made. An unscrupulous or inexperienced lender can lead their clients to financial peril — something that keeps the specialists from our company up late at night. Through hard work, we’re dedicated to making the decision of a reverse mortgage simple and easy for our clients to ensure they are able to obtain the capital infusion they need.

For our past clients like Oliver and Amelia Smith, they were looking for funds to both provide improvements for their home and to pay off lingering medical bills. The Smiths were both over the age of 62, and were looking to downsize their home by moving into a smaller apartment that was near their grandchildren. Each we retired and had a fixed amount of capital with which they could collectively spend in their remaining years. However, they did not want to dip into these funds as they were mainly tied up into stocks and bonds. Therefore, the concept of a reverse mortgage was especially appealing to both.

What is a Reverse Mortgage?

To take a step back, a reverse mortgage is a financial product that is advantageous to seniors over the age of 62 that are often cash poor but house rich. This financial product is similar to a regular mortgage. A regular mortgage requires consistent and diligent payments on a fixed amount and schedule over the course of several years — usually between 20 to 30 years. People that take out a regular mortgage are often seeking to purchase a property, such as a home for themselves and their family.

Once a property is selected, the person seeks out a bank that will provide a loan to purchase the property in the form of a mortgage. After several years of payment, the property will eventually switch hands from the bank to the lendee.

A reverse mortgage puts the power back into the senior’s hands. Rather than paying the bank, the bank pays you. For the Smiths, the reverse mortgage allowed them to secure needed capital by selling the equity in their home. Therefore, the couple was able to have money to make the adjustments to their home without spending the principle on their investments.

Selecting the Best Reverse Mortgage Lender

When selecting the best reverse mortgage lender, an excellent place to start is by utilizing seasoned databases. Two that stand out are the National Reverse Mortgage Lenders Association (NRMLA) lender locator, and the U.S. Department of Housing and Urban Development’s lender list. For the former, lenders are required to agree in writing that they interact with their clients “in an ethical, professionally responsible, and lawful manner.” While the latter provides FHA insured companies that are located both in the state and nearby your current residence. Each of these tools are advantageous to take advantage of.

To narrow the field on possible options from the database, a previous financial advisor, such as an accountant, can most likely steer you in a good direction. A good recommendation is something that shouldn’t be taken lightly, especially from a current financial professional you trust. For the Smiths, that was exactly what they did — they spoke with their CPA who directed them to our company.

Of course, prior to doing business with our company, they checked the Consumer Financial Protection Bureau’s Consumer Complaint Database and received no conflicting information that would steer them away from utilizing their CPA’s recommendation. The Smiths met a specialist from our company to help them make the best decision.

Is a Reverse Mortgage Right for You?

reverse mortgage pros and consDuring the conversation with the Smiths, we discussed a wide range of topics that are important to consider before taking out any financial product. This ranged from their lifestyle and goals to their previous savings and their plans after death. From this conversation, one important piece of information was learned, which was that they had a poor credit. The couple was worried about how this would affect their desire to receive a capital infusion.

As most Americans understand, poor credit influences any major financial decision that is made. A credit score is like a report card that lets lenders know how risky the person may be when lending them money. Fortunately, a borrower’s credit isn’t relevant in securing a reverse mortgage. As a seasoned reverse mortgage lender will tell you, what matters is the age, the type of reverse mortgage, the appraisal value of the property, current interest rates, and an assessment of paying maintaining payments on the home like taxes and insurance.

During the conversation, we also discussed how they were looking to live their next 10 to 15 years of their lives. For the Smiths, they were planning on downsizing their home within five to seven years, preferably moving to a new place nearby their grandchildren. In the meantime, we discussed the amount of capital necessary to remodel their home and to increase the overall value of their property. Asking the important questions made their decision very easy.

Also important to keep in mind is the right of rescission. Within three days of closing, if you and your significant other does not feel that the deal is in your best interest — for whatever reason — one can cancel the deal without any penalty. We have yet to encountered this problem as our specialists take the necessary steps and questions to ensure understanding and ultimate client satisfaction.

Our specialists are standing by to help you today! To find out if you qualify, call (888) 547-8308. Our business hours are from Monday to Friday, from 9 a.m. to 8 p.m. EST; and on Saturday to Sunday, from 12 p.m. to 3 p.m. EST. During non-working hours, we advise you to visit our Learning Center or review our Frequently Asked Questions page, which provides answer to some of the most common scenarios and questions that our past customers have seek assistance on.