A reverse mortgage is a complicated financial product, so it’s important to ask all your questions upfront to ensure you have a solid understanding of how the loan works and what the expectations are. Below are some questions to keep in mind when considering a reverse mortgage.1
Who am I working with?
When shopping for a reverse mortgage it’s recommended that you work with a lender who specializes in the product and who is a member of the National Reverse Mortgage Lender’s Association (NRMLA). This is important because NRMLA members are required to follow a strict code of conduct and professional responsibility. To find a lender that’s a member of NRMLA, click here. It’s also a good idea to check the lender’s rating with agencies such as the Better Business Bureau.
Is a reverse mortgage the right product for me?
This depends on your situation, but a good loan officer will focus on how a reverse mortgage can provide solutions. For example, he/she should ask what problems the borrower is looking to solve. The loan officer should ask about goals, one’s level of financial fitness, how finances will change in the coming years, and if the borrower will need to make any large purchases such as a car. This information will help the loan officer determine if a reverse mortgage is the right fit, and if so, is now the right time or should you wait. The loan officer can also explain fixed versus variable rate options, the best way to receive their loan proceeds, and answer any other questions you may have.
How long will the loan process take?
This depends on a number of factors; however, the length of time is partially within your control. For example, prior to getting a reverse mortgage you must attend a counseling session and provide your lender with the required certificate. Depending on your scenario, you may also need to provide your lender with additional or missing documents to clear any outstanding conditions during the loan processing stage. Delays in providing this information can extend the loan process. Some lenders are committed to closing your loan within a certain timeframe, and may even offer a credit towards closing costs if they’re unable to meet that commitment.
Should my heirs be involved in the decision?
A reputable lender will encourage your heirs and/or children to participate in the process. In fact, adult children often inquire about reverse mortgages on behalf of their parents, so it makes sense to have everyone involved in the discussions.
If you’d like to learn more about reverse mortgages or want to find out if you’re eligible, please use our Reverse Mortgage Calculator or call us at 800-218-1415.
1 6 questions to ask before getting a reverse mortgage loan – bankrate.com, by Holden Lewis, 11/1/16, http://www.bankrate.com/finance/mortgages/questions-before-getting-reverse-mortgage-1.aspx?tc=eml.
Author: Meredith Manz