5 Quick Tips For Selecting A Reverse Mortgage Lender

Reverse mortgage loans are complicated. You want to be sure you are working with a true professional who will act in your best interest. In order to find the best reverse mortgage lender, consider these five quick tips.

1. Know which kind of reverse mortgage loan you need - 90% of the reverse mortgage loans funded are called HECM (Heck 'em). They are insured by the Federal Housing Administration (FHA). HECM loan limits are determined by county. You can find the HECM loan limit in your county and then you'll know the maximum you'll be allowed to borrow under this program. If you want to borrow more than the limit in your area, you may choose a proprietary reverse mortgage product. Different proprietary reverse mortgage lenders might offer niche products covering things like jumbo loan amounts, unique property types, higher loan-to-value ratios, etc. Determine if your loan will fit the HECM profile or if you need a different type of reverse mortgage.
2. Compare at least three Good Faith Estimates and TALC disclosures - Don't be shy. It is OK to ask. Reverse mortgage lenders are very used to people comparison shopping. Reverse mortgage lenders are required by law to provide their clients with accurate estimates of interest rates and all costs associated with taking out a reverse mortgage.There is a special disclosure for reverse mortgages called a TALC (Total Annual Loan Cost) that you'll need to compare--this form is used because with a reverse mortgage, you don't know what the final loan balance will be the way you would with a conventional loan.
3. Get quick responses to your calls and emails - You need your lender to respond in a timely manner throughout the transaction. Sometimes the person who gives you the cheapest Good Faith Estimate doesn't even reply to your emails or calls. Consider if saving a few bucks is worth the hassle and wait time.
4. Read the Code of Ethics at NRMLA - The National Reverse Mortgage Lenders' Association (NRMLA) published a Code of Ethics for their member lenders to follow. Be familiar with how a reverse mortgage lender should behave. If at any point you feel your lender is being unethical, find someone else with integrity. NRMLA's Code of Ethics is online and available to the public.
5. Do Internet research - It's easy online to find a professional reverse mortgage lender in your area. Then talk to a few loan agents, get your disclosures, and make an informed choice.

Reverse mortgages can be complicated. That's why HUD requires that all seniors taking out HECM loans obtain mortgage counseling from a HUD-approved counseling service. However, counseling is a good idea for anyone who doesn't feel completely comfortable making a reverse mortgage choice. It helps make homeowners more comfortable with the disclosures and more confident in lender selection.