Once you have decided to go for reverse mortgage, choosing a professional and good reverse mortgage lender is equally important. There is a plethora of lenders selling reverse mortgage, mostly HECM. It is a two step process:
- Identifying a list of potential lenders
Zeroing down to the best
Identifying list of potential lenders:
Some possible ways of identifying lenders in your area are:
- Websites / internet research: You can find details of lenders in your area using internet research. The best place to find is on HUD website, for approved lenders list, please carefully follow the the instruction to search the lenders near your place as not all lenders will be available everywhere.
- Asking friends and existing reverse mortgage clients: This can be a great way to find out lenders in the area and also get feedback on them based on firsthand experience of your friends
Zeroing on the best:
- The basic requirement to identify a lender is to first have detail knowledge of reverse mortgage yourself. Please visit various articles on our website on reverse mortgage to understand it.
Once you know in detail about the product, all that remains is to ask right questions to the shortlisted lenders. Some of the key questions which you should definitely consider asking are:
- Does my home qualify: While you might think it does, the lender may feel other wise
- What are the payment options: How will you be paid. There are several ways a borrower can be paid by a lender such as monthy payments, lumpsumpayments, etc. Ensure that you have a right plan suiting your requirements
- What are associated costs: What will be costs associated with the reverse mortgage. This may include variety of costs and it generally varies from lender to lender within restrictions defined by HUD.
- How will my Govt. assistance taken care of: You might already be part of Govt. assistance programs. While some programs such as Social Security and Medicare remain non-impacted, it will be a good idea to get details on others such as Medicaid.
Above are some of the questions and you can ask many more during counseling sessions and with lender representative etc.
Generally cost is an important aspect to decide the lender, but make sure that you get some feedback on the lender from other sources (friends, etc.) before going ahead.