How to Find the Most Trustworthy Lender For Your Reverse Mortgage

When you reach retirement age and find that you don’t quite have the income coming in that you need to cover your expenses and maintain a secure, comfortable lifestyle, one thing you’ll probably hear about as a potential solution to this problem is a reverse mortgage. You’ll probably also hear a lot of opinions about them, too: pros and cons, benefits and downsides. As financial products go, reverse mortgages can be pretty controversial, but in many circumstances they can make a lot of sense as a way to provide yourself with cash flow to get through trying times or free up money that’s tied up in your home equity. To get a reverse mortgage, you have to meet certain qualifications. You have to be at least 62 years old, and you have to have either paid off your existing mortgage or have only a small balance remaining that can be paid off with funds from the reverse mortgage. Once the reverse mortgage is finalized, you’ll get either monthly payments, a lump sum payment, or a line of credit based off the equity in your home, and it doesn’t have to be paid back until the house is sold—either when you choose to sell it or after you pass away. That may sound like a pretty good deal, but the benefits you get from a reverse mortgage will depend a lot on the institution you get it from. Quality lenders will offer you reasonable fees, objective financial counseling, and steer you to a reverse mortgage solution that’s tailored to your needs and circumstances. Here are a few ways to make sure you’re not being taken advantage of when you go looking for a reverse mortgage lender.

First of all, beware of scams! There are plenty of unscrupulous characters out there looking to defraud elderly people out of their savings, and complicated schemes involving reverse mortgages can be one of the ways they try to do it. You should only enter into a major loan like a reverse mortgage with a lender that you’ve found and carefully selected yourself, and watch out for anyone who approaches you with money-making schemes that involve taking out reverse mortgages to buy investment properties, finance home renovations, or purchase annuities.

You’ll also want to consider that reverse mortgage lenders that go out of their way to advertise or push their loans may be more focused on making a quick buck than delivering a good value on reliable financial products. Aside from making sure their checks clear, celebrity spokespeople aren’t doing any financial vetting of the companies they’re pitching for. Also, be wary of any lender that uses high pressure sales tactics once they’ve got you in the door. Getting reverse mortgage is a big decision with major implications for your financial future and for your heirs, too. A lender you can trust is going to let you take all the time you need to deliberate, evaluate, and fully understand what you’re getting into.

So what should you look for in a quality reverse mortgage lender? First of all, keep in mind that the best reverse mortgage companies might not be big banks you’re already familiar with. Going through an organization like the National Reverse Mortgage Lenders Association, the US Department of Housing and Urban Development, or the Better Business Bureau can help you find ethical, reputable lenders in your area. Once you start talking to a lender, make sure you come prepared with all the questions you want your loan officer to answer. Be sure to ask them to walk you through the potential risks and negatives of reverse mortgages—you want to be working with a loan officer who’s going to be honest and straightforward with you, not somebody who’s just looking to close a deal regardless of whether it’s the best decision for the borrower. While comparison shopping at with different lenders can be time consuming, it’s worth the effort. Reverse mortgage fees can be fairly high compared to what you might expect to be charged for other loans, so you’ll want to make sure you’re getting the best rates you can find.

A reverse mortgage is a loan that, in many cases, you’ll literally have for the rest of your life, and choosing the right lender to deal with can make matters easier for your children or other relatives that may end up having to handle your estate. This is definitely a situation where you want to have complete trust and confidence in the institution you’re borrowing from, so make sure you take as much time as you need to make the best possible decision, and one you’re completely comfortable with, if you end up getting a reverse mortgage on your home.