How to Shop for the best Reverse Mortgage

by | Nov 11, 2016 | Financial Services

If you are thinking about getting the best reverse mortgage, you should shop around. Determine what kind of reverse mortgage may be the right one for you. This may depend on what you want to do with the funds. Compare the terms, options and fees from different lenders. Study as much as possible regarding reverse mortgages prior to talking with a lender or counselor. And ask a lot of questions to ensure a reverse mortgage works for you–and that you are getting the proper type for you.
Below you’ll find a few things to take into consideration:

Do you want the reverse mortgage to pay for property taxes or home repairs? If so, figure out if you’re eligible for a low-cost single purpose loan inside your locality. The staff at local agencies might know about the programs within your area. Locate the closest agency near you or ask about “grant or loan programs for home improvements or repairs”, or perhaps “property tax deferral”, or maybe “property tax postponement” plans, as well as how you can apply.

Do you reside in a higher valued house? You may have the ability to borrow more funds with the proprietary reverse mortgage. However, the more borrowed, the greater the fees you will pay. Also, you may think about getting an HECM loan. A lender or HECM counselor may assist you in comparing those kinds of loans side by side, to check what you will receive–and what it’ll cost.

Compare costs and fees. This will bear repeating: shop around then compare the prices of the available loans. As the mortgage insurance premium usually is the same from one lender to another, the majority of loan costs–which include servicing fees, closing costs, interest rates, and origination fees–will vary amongst lenders.

Know total loan repayment and costs. Ask a lender or counselor to go over the TALC (total annual loan cost) rates: they’ll display the projected yearly average price of a reverse mortgage, which includes all of the itemized expenses. Plus, no matter what kind of reverse mortgage you are considering, know all of the reasons why the loan may need to be paid back before you were prepared to do it.

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