Reverse Mortgage Guide

You undoubtedly have read the thousands of print articles that have been circulated throughout the Internet along with disparate thoughts and ideas that are reflected in the thousands of blogs. Accordingly, I have come to realize that what people believe about reverse mortgages can be split into just a few categories.

Category #1 It is just too good to be true.

Category #2 Closing costs are too expensive therefore stay away

Category #3 It is a wonderful program – do it

Category #4 It is bad for the heirs

Category #5 A lot of interest is due at the end of the loan. Stay away. And now there is a 6th category

Category #6 Reverse mortgages will become the next mortgage crisis.

So what is the truth? It can’t be good and bad. It can’t be right and wrong. ..So the question becomes how do you make a decision?

I believe that confusion reigns because people fail to look at all sides of the “equation”. Everything in life has its plusses and minuses. You can’t look at one side without looking at the other side. Yet that is how most of us make decisions.

In fact if we were to apply how we make “life event decisions” this is what it would like: When crossing the road, we would look one way instead of left and right; When running a business we would look at revenues, while ignoring expenses; When hiring a doctor, lawyer or accountant we would focus on their fee, rather than on their expertise.

In other words, we look at one thing to the exclusion of everything else.

The above noted categories evoke this kind of thinking. We are generally in a rush to come to a conclusion. And when a conclusion is reached, all thinking stops.

To say that it is too good to be true, or closing costs are expensive, or it is bad for the heirs, or it is a wonderful program, or the interest due increases or it is the next mortgage crisis, is merely a fast way to facilitate arriving at that conclusion.

Too many individuals focus on the features of the program only. There is no focus on what the program can do for the client. Both must be addressed. If after careful analysis you determine other options will work best, at least a decision was crafted based upon a view of reality.

There is a way to insure that you view the relevant issues from all sides. You need a loan officer and a company that lives the code of conduct promulgated by NRMLA (National Reverse Mortgage Lenders Association). This loan officer needs to possess fairness, integrity, competence, confidentiality, diligence and professionalism. These are the values promulgated by NRMLA in their new code of ethics.

In short, what all this means is that the person you deal with will help you reach the right conclusion after considering all the facts and circumstances. Yes, this means not pursuing the reverse mortgage if better options are available.

Attorney Dennis Haber is the author of the just-published, ground-breaking book, Piggy Bank Your Home: Tap Into The Power Of A Reverse Mortgage.

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This entry was posted on Tuesday, March 18th, 2008 at 3:53 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.