Having over 13 years of experience specializing exclusively in the reverse mortgage business, I sometimes forget that most people don’t know what they
don’t know about reverse mortgages. What I mean by this is that you should never sign any papers without being 100% sure of exactly what it is that
you are doing.
Do your homework first.
Over the past 6 weeks I have met with three couples that all signed loan packages from out of state lenders before having second thoughts and calling a
local professional who can meet with them in person—me.
In one case, a loan officer in my office had me call a past customer of hers who were sure they were going to do a reverse mortgage. The loan officer had
heard me talk about reverse mortgages enough to know that it might not be the best choice for her customers because they’re planning to sell their
home and move in a couple of years.
Reverse mortgages might not be the best option for this situation because sometimes the upfront costs could be prohibitive. A reverse mortgage is
intended for people who plan to stay in their home for the foreseeable future. The fact that they were planning to sell doesn’t automatically mean
they shouldn’t do it, but I didn’t think they fully understood what they were doing. In addition, this couple had signed a loan application with an
out of state company and sent it back before they even completed the required counseling.
Anyone who wants to get a reverse mortgage must meet with a third party counselor that is approved by the Department of Housing and Urban Development (HUD).
The reason for this counseling is to make sure that a senior homeowner is not getting taken advantage of and understands completely what they are doing.
The counselor also will talk to them about possible alternatives as well as go over the responsibilities of having a reverse mortgage.
You should never sign the application for a reverse mortgage without doing the counseling first. An honest and legitimate reverse mortgage specialist would
never ask someone to do this. To cut to the chase, I went out and met with these wonderful people and I think I talked them out of doing the reverse
mortgage at all, which I am fine with. After meeting with me they understand how it works better and are re-thinking if it is right for them at this
Don’t get me wrong, I only get paid when someone actually closes the loan, (signs the final closing papers). I want people to do a reverse mortgage, but
only if they fully understand it and it’s the right loan for their specific situation.
My hope is that when they sell their home a couple of years down the road that they will call me and take a look at the reverse mortgage for purchase program.
This is a loan that allows people to get a reverse mortgage to buy a home.
Either way, I hope that I helped them make the best decision for them. The last thing I want is for anyone to get a reverse mortgage and be upset with
their decision and blame the “lousy reverse mortgage loan” when they should be blaming the “lousy loan officer” who gave them a loan that
wasn’t right for their situation.
The other two couples that I met with who had started the process with out of state lenders, decided to go with me once we met and they realized that they
were not getting the kind of service or deal that an experienced, local reverse mortgage specialist can offer.
I know you’ve heard the term “buy local”. This applies to your reverse mortgage loan as well. If you are at all like me, I learn best when I can sit down
with someone and have them explain all the details in person. I also like to look them in the eye and see if they are telling me the truth.