You’ve decided the New Reverse Mortgage fits your retirement needs, so choosing the right Reverse Mortgage lender is the crucial first step toward a safe and secure retirement..
According to a recent Google search you have more than 4,000,000 choices, here are some tips to help you narrow that down a little. Because 99% of reverse mortgages are HUD Home Equity Conversion Mortgages 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 the best rate, 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 protect you and guarantee that 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.
But there are other closing costs that may differ from lender to lender such as closing costs, origination fees, interest rates and monthly servicing fees. Ask about the low cost or no closing cost options to save thousands of dollars.
Does the lender specialize in The New Reverse Mortgage?
The FHA Home Equity Conversion Mortgage (HECM) was first introduced in 1987 and as with most government programs it had a few bugs. Always keeping in mind the goal of the reverse mortgage program is to provide peace of mind for seniors during retirement many consumer protections, refinements and improvements have been added to the original program.
The New Reverse Mortgage offers a number of options that allow you to create a personalized retirement vehicle that will help you reach your retirement objectives. As a result there are variations within The New Reverse Mortgage that not all “specialists” are aware of.
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 who’s also a senior?
You have that option too.
Is your Reverse Mortgage Lender a member of NRMLA?
Look to see if a potential lender 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.
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 the 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.
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.