If you’re interested in learning more about reverse mortgages, you may be hesitant to reach out to certain lenders. After all, it’s an important financial decision — and working with a reliable, honest, and experienced mortgage company is essential.
If you’re wondering, “How do I find a qualified and honest reverse mortgage lender?” you are probably already savvy enough to know that internet searches don’t always provide the best results. However, they can be a good starting point.
Searching Online for a Reverse Mortgage Lender
If you are looking for a reverse mortgage lender or loan originator online, be diligent about checking for these qualifications:
Experience
How long has the loan officer been originating mortgages? Do some digging to find out if they have a specific background in reverse mortgages. Even seasoned, trustworthy loan originators may have limited expertise when it comes to reverse mortgages (also known as HECM loans), which have different requirements than traditional mortgages.
Reviews
Check out the loan officer’s reviews and make sure they have mostly 5-star ratings. If most of the reviews are positive, this usually indicates a commitment to exceptional service and good results.
At the end of the day, you need to feel confident and comfortable with the loan officer you choose, because they will be the person you communicate with throughout the process.
Company Reputation
Finally, research the loan originator’s company, and find out:
- How long it has been in business
- How the company is licensed (direct lender vs. broker)
- Any noticeable patterns/comments in the company’s online reviews from previous customers
Credentials
When looking at the company, make sure they are designated as an approved lender by the Federal Housing Administration (FHA) and Department for Housing and Urban Development (HUD). Because HUD companies are direct lenders (as opposed to mortgage brokers), this will typically save you time and sometimes even money.
Handling the Initial Conversation with a Potential Lender
When you first contact a potential lender, pay attention to your intuition.
“Call center” loan officers will often “sell” you the loan, but then you go into a queue; so, each time you call, you typically talk to a different person. Most people don’t want to be treated this way, especially when you’re dealing with a major financial decision.
During the initial conversation with the lender, here are a few things to take note of:
- Is the loan officer patient and willing to answer your questions?
- Is the lender clear about the different terms and costs available for reverse mortgages? Do they explain the costs clearly and not try to hide them by emphasizing only the possibility of no “out-of-pocket” costs?
- Is the loan originator clear about your responsibilities regarding property taxes, insurance, and property maintenance costs?
- Has the lender suggested you seek appropriate tax advice or seek guidance for government welfare programs, if those are relevant to your situation?
- Does the lender demonstrate knowledge or interest in sharing more information on retirement income planning, so that you have a better sense of the right options and strategies for your situation?
If you’re getting bad “vibes” during the phone call, don’t ignore those feelings. Here are some red flags that might suggest that the lender is not the right choice for you:
- The loan originator presses you to make a decision before you feel comfortable or ready.
- The lender pressures you to take a larger distribution from the line of credit than you are comfortable with at closing.
- The loan officer encourages you to purchase an insurance product or other investments with the proceeds of your reverse mortgage; if this happens, ask if he or she will receive compensation for the additional financial products.
Finding the Most Qualified Reverse Mortgage Lender
Selecting a skilled loan professional at the beginning of your reverse mortgage process will ensure that you find the right product for your unique situation.
If you follow these guidelines, you will find a high-quality loan officer who will make the experience an easy and even pleasant one.
At Waterstone Mortgage, we help seniors explore whether a reverse mortgage is ideal for their current circumstances and long-term goals. Because reverse mortgages are unique, we take the time to answer questions, address concerns, and help our potential clients strategize for the future.
Interested in learning more? Get in touch with a trusted Reverse Mortgage Specialist at Waterstone Mortgage to see if you might qualify for a reverse mortgage. It’s our goal to help senior citizens create a more financially stable and secure retirement.
These materials are not from HUD or FHA and were not approved by HUD or a government agency.
The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage (HECM), and is only available through a Federal Housing Administration (FHA)-approved lender. Not all reverse mortgages are FHA insured. When the loan is due and payable, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds. A lender may charge an origination fee, mortgage insurance premium, closing costs and servicing fees (added to the balance of the loan). The balance of the loan grows over time and you are charged interest on the balance. Borrowers are responsible for paying property taxes, homeowner’s insurance, maintenance, and related taxes (which may be substantial). There is no escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable (and the property may be subject to a tax lien, other encumbrance, or foreclosure) when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms. Interest is not tax-deductible until the loan is partially or fully repaid.
