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August 26, 2014
A reverse mortgage is a long-term commitment, and one that shouldn’t be entered into lightly. It’s not actually a true mortgage at all, but a loan against the equity that you have in your home. That difference alone is enough to show just how important it is to get all the facts you can about the reverse mortgage company you’re planning to work with.No company is perfect, and you might find that all of them have one or two elements of doing business that make you a bit uneasy. That’s normal, and a good sign that you’re not susceptible to predatory lending practices. The important thing is to compare several before deciding on one. That way, you have a much better idea of what to expect. Here are a few questions you should ask yourself while shopping around for a reverse mortgage: Does the Reverse Mortgage Company Explain the Cons?While there are many benefits to a reverse mortgage, you’re probably already aware of most of them. When looking for a trustworthy, experienced reverse mortgage company, you’ll want to find one that’s as eager to explain both the risks and the rewards. Reverse mortgages can be an expensive way to obtain a loan. And having one can dramatically change your retirement planning. A reputable company wants you to understand exactly what you’re signing.
Are You Expected to Have Financial Counseling?You know your financial situation better than anyone. However, counseling is a requirement of securing a reverse mortgage. This isn’t an affront to your money management skills; it’s an important step in helping you become better at it.
Reverse mortgage counseling comes from a government approved agency and the session will help you to weigh the pros and cons of a reverse mortgage for your particular situation. The counseling is also designed to help you plan for an overall secure retirement.
Do You Feel Rushed or Pressured?If the reverse mortgage company is more excited than you are, be a bit skeptical. You should never feel rushed, and you should never feel any pressure to sign in the dotted line.Pressure from a company could mean the agent you’re working with is getting a commission. That’s not inherently a bad thing, but it shouldn’t guide the process. A good company will be sure you understand that you can walk away from the agreement at any time before you sign. Your retirement decisions shouldn’t be based on someone else’s financial goals.
Is the Company Shy About its Licensing?Reputable companies are licensed and approved by FHA. And at the state level, you’ll want to look at the National Mortgage Licensing System, or NMLA. This licensing means the company has successfully gone through the scrutiny of background checks and a host of other examinations. Membership in the National Reverse Mortgage Lenders Association, of NRMLA, is a good sign.The company will certainly ask for your personal information to determine creditworthiness. So don’t be shy about asking for what you need to determine “lender worthiness.” Most will kindly offer all of the evidence you need to feel more comfortable. If not, it’s time to move on. Can You Find Testimonials?They’re not the most important factor in choosing a reverse mortgage company, but testimonials can help you feel more confident about who you are working with. Some home owners are shy about offering up information about obtaining a reverse mortgage, but some are not. An absence of testimonials doesn’t mean you should walk away. But having them means you have one more reason to trust the person on the opposite side of the desk. Also consider checking at the Better Business Bureau. A reverse mortgage can be one of the best and most beneficial choices you make. It lets you keep your home while accessing the equity you’ve spent years building up, and that can help retirement become more comfortable than you imagined. Just use discretion when choosing a company to work with. Don’t start and end your search at the desk of the first one you call. Comparison shopping isn’t just for buying a vehicle; it’s for every major financial decision in life.NewRetirement can help you find a reputable reverse mortgage company that fits your needs and makes you feel comfortable every step of the way.
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