Your house is probably one of your most prized assets. It’s where you’ve raised your family, made memories, and it has also gained equity during those years. If you own your home and are 62 years or older, you may be able to convert the equity in your home into cash with a reverse mortgage loan.
With a reverse mortgage, finding the right lender could be one of the most important decisions you will have to make. But, how do you know which reverse mortgage lender is right for you? Here are some things you might want to consider:
As with any loan, reverse mortgages will have a lot of paperwork and disclosures. You will want to find a lender who will take the time to explain all the terms and requirements to you. Lenders should be transparent about the costs involved with obtaining a reverse mortgage.
One of the ways to evaluate a lender’s credibility is by checking their rating with the Better Business Bureau (BBB). Anything below an A+ rating may not be a lender you should consider working with. You should also ensure that their loan officers are licensed with the Nationwide Multistate Licensing System (NMLS) as this is a requirement for reverse mortgage loan originators.
While this probably isn’t the first time you’ve applied for a loan, it may be the first time you’ve applied for a reverse mortgage. You’ll want to have an understanding of what to expect from start to finish regarding the loan process.
A key component in getting a loan is communication. You should be able to contact your lender and speak with a live person, during normal business hours, whenever you have a question. Furthermore, your lender should provide weekly updates on the status of your loan as it moves through the process. If you are unable to reach your lender, or they are not returning your phone calls, that could be a red flag to look elsewhere.
Once you submit your loan application and complete your reverse mortgage counseling session, it should take around 60 days or less for your loan to close. Ask your lender outright how long they usually take to process their loans.
Most importantly, if you change your mind or want to stop the process any time before your loan funds, your lender should allow you to do so.
A good reverse mortgage lender will recommend a tax advisor/professional to provide additional information to you about the tax requirements and the potential implications to your benefits after securing a reverse mortgage loan. If the lender doesn’t allow you to discuss your options with another trusted financial advisor, ask why and see how the representative reacts. If he or she is uncomfortable with you seeking additional advice, you may want to consider looking for a different lender.
Deciding to get a reverse mortgage is a big decision and you should take your time to find the lender that fits your needs. If you’d like to get connected with a direct lender to learn more about reverse mortgages, call (800) 976-6211 to speak with a licensed reverse mortgage specialist.