How do I choose the right New Reverse Mortgage Lender?
The New Reverse Mortgage is more than just a loan program it’s a retirement lifeline. So finding the right professional to answer your questions is the first step in deciding if a reverse mortgage is right for you.
Because 99% of reverse mortgages are HUD Home Equity Conversion Mortgages (HECM) we’ll focus on that loan program.
How are Reverse Mortgage Lenders approved?
All lenders have to be approved by HUD to participate in the FHA Home Equity Conversion Mortgage (HECM) program.
Whether you decide to use a direct lender or a mortgage broker they all have to meet HUD’s stringent standards.
A mortgage broker, however, works with a number of different lenders which means you will have more options. Just like you would visit several dealers and explore different models in the search for a new car, shopping around for a reverse mortgage can help ensure you are getting more than the best rate. You’ll be getting the right loan type and terms for your retirement.
FHA Mortgage Insurance Premium – Insurance to protect you
All reverse mortgages insured by the Federal Housing Administration require a Mortgage Insurance Premium (MIP).
Unlike traditional mortgage insurance, MIP required on Reverse Mortgages protects you and guarantees:
1) the reverse mortgage will always be there for you no matter how long you live in your home
2) If your home is worth less than you owe when you pass away, your heirs and estate won’t be liable for any shortfall.
Does the lender specialize in The New Reverse Mortgage?
According to the Cambridge dictionary a specialist is someone who limits his or her studying or work to a particular area of knowledge, and who is an expert in that area.
The FHA HECM was first introduced in 1987 and as with most government programs it had a few bugs that had to be worked out. In the last 30 years many consumer protections, refinements, improvements and safety features have been added to the original program and only a true specialist will be able to tailor the many options of the HECM program to fit your individual retirement needs.
Related: The New Reverse Mortgage
It’s important to get to know your Reverse Mortgage Lender
How would you prefer to conduct business?
If you’re OK working with a 20 something in a call center in Detroit or Charlotte, the “big box” lenders are there for you.
Other lenders have added reverse mortgage to their multi-page product menu, but few truly specialize in working with the needs of seniors.
Do you prefer working with a local company that specializes in the New Reverse Mortgage and the retirement challenges faced by seniors? Are you more comfortable meeting one on one with a Reverse Mortgage professional? You have that option too.
Do you trust him/her?
Finally, and most importantly do you trust your lender is putting your best interests ahead of quotas and corporate profits?
Trust is a quality built over time and your Reverse Mortgage professional should be prepared to earn your trust before asking for your business.
There are countless Reverse Mortgage options and a professional Reverse Mortgage specialist will ask questions to narrow down your choices to the ones that apply to you and give you comparisons so you can make an informed decision.
Is your Reverse Mortgage Lender a member of NRMLA?
Look to see if he/she is a member of the National Reverse Mortgage Lenders Association (NRMLA).
NRMLA has developed a list of “best practices” for the reverse mortgage industry, and each member is required to abide by these best practices. The lenders who are members have signed NRMLA’s Code of Conduct & Professional Responsibility..
How do I know if a Reverse Mortgage is right for me?
If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.
From the desk of Greg Cook