With so many lenders in the marketplace today, it is important to find the one who will best suit your needs.
What You Should Consider When Choosing a Lender
Do Your Homework
When choosing reverse mortgage lenders, start by researching any specific reverse mortgage lender you may be considering, and verify their memberships with professional organizations. The Better Business Bureau and National Reverse Mortgage Lenders Association are two affiliations that require members to adhere to specific codes of ethical conduct when offering a reverse mortgage service.
Pay Attention to Your Instincts
Your first impression of a reverse mortgage lender is very important -- ask yourself: do I feel comfortable with this individual? If you are at all uncertain about your reverse mortgage lenders, you may consider finding a loan specialist that better suits your needs. You want to increase your odds of getting the best reverse mortgages or other loans available for your needs. Being comfortable with your reverse mortgage specialist will help ensure a positive experience for all involved. It will help ensure you get the quality of reverse mortgage counseling that you need.
Get Your Questions Answered
A reputable reverse mortgage lender should be able to answer your questions directly and thoroughly. If your specialist is giving you vague answers or inconsistent information, it may be wise to consider a different reverse mortgage lender. Occasionally, you may inquire about something that your loan specialist has never been asked before. In such a situation, a reputable lender will admit they are not entirely certain; however, they should find the answer and respond promptly with the information you are seeking.
Keep Your Eyes and Ears Open
Assess the objectivity of your reverse mortgage lender. A reverse mortgage lender that pressures you into a specific option without allowing you to consider the reverse mortgage pros and cons associated with the specific loan may not have your best interests in mind.
Be Wary of Cross-Selling
Some reverse mortgage lenders entice borrowers to purchase products such as insurance or annuities with the proceeds from their reverse mortgage loan. Using your equity for these types of investments is almost never beneficial and should never be a condition of loan approval. The Federal Housing and Stimulus Act of 2008 contains a provision which restricts the inappropriate cross-selling of products to reverse mortgage applicants.
Take Counseling Seriously
If the lender you are working with downplays the importance of pre-loan counseling, be cautious. Reverse mortgage counseling is your opportunity to fully understand the many features of this unique product. The federally insured reverse mortgage requires pre-loan counseling; if you are never required to complete counseling, your loan will not carry the benefits of being a federally insured reverse mortgage. When shopping, you want the options for the best reverse mortgages available.
Review All Paperwork
Verify that any paperwork sent to you by your reverse mortgage lender is accurate and complete prior to signing. Notify your agent of any inconsistencies you come across to ensure that the paperwork is properly processed.
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When Choosing a Reverse Mortgage Lender, Ask Yourself:
- Does the lender seem reputable, knowledgeable, and honest?
- Does my reverse mortgage specialist answer all of my questions in terms that are easy to understand?
- Am I getting the quality of reverse mortgage counseling I need to make an educated decision?
- Is the lender easy to reach?
- Does the lender encourage my participation in the pre-loan counseling session?
- Were my questions (if any) about reverse mortgage pros and cons resolved?
- Does my reverse mortgage specialist react positively when I mention discussing my options with a third-party?