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How do I Choose the Best Reverse Mortgage Lender?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 13 February 2020
  • Copyright Protected:
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    Conjecture Corporation
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Choosing the right reverse mortgage lender is very important if you want to enjoy financial stability during your retirement years. With the right lender, homeowners can look forward to a steady flow of income from the value of the home while remaining in residence and making the most of those years. There are several things to keep in mind when evaluating reverse mortgage lenders, including the reputation of the lender, the structure of the reverse mortgage itself, and the amount of the monthly disbursement received from the loan.

The first step in searching for the ideal reverse mortgage lender is the creation of a list of prospects. This can be accomplished by using a combination of resources. Check the local telephone book for contact information on lenders in your community, and augment those results with online searches. In a short time, you should be able to compile a listing of lenders that are worth your consideration.

With the list in hand, take some time to research each reverse mortgage lender on the list. Make it a point to consult resources such as consumer reports, business bureaus, and even bankers' associations. The idea is to make sure that every lender on the list has a reputation for honesty, integrity, and supporting their clients according to the terms of the loan agreements they offer. If you come across information about any reverse mortgage lender that causes distress, remove that lender from the list immediately.

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Once you have qualified each reverse mortgage lender and narrowed the list to those who are most likely to offer the best support and contract terms, begin making direct contacts. State the purpose for your contact, and make it clear you are gathering information to compare with several other lenders. Ask for disclosure statements that provide data regarding all the charges and fees that are part of the contracts offered, and also get some idea of how the interest rate is applied to the balance. You also want to find out who offers various disbursement options, since some lenders will offer quarterly, semi-annual, and even annual disbursements along with the monthly option.

With all the relevant data in hand, compare the terms offered by each reverse mortgage lender, and identify the top three on your list. With these three, go a little deeper, asking questions about factors such as customer service, the exact rates you can expect from each one, and how long it usually takes to process an application. Since there is a good chance that these top three lenders will offer very similar terms and support, focus in on the one who seems to be most interested in helping you select the right option and not just someone who wants to close a deal. Doing so will increase your chances of working with the reverse mortgage lender who is most likely to be the right fit, allowing you to enjoy the benefits of this type of financial arrangement.

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