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How to Find the Right Reverse Mortgage Lender for You

Reverse Mortgage Lender

As you and your spouse get older, you may begin to have anxieties about being able to afford retirement. One strategy for having a happier and more comfortable retirement is a reverse mortgage. In brief, a reverse mortgage allows you access to your house’s equity without being forced to sell your home or move elsewhere. There are advantages and disadvantages to a reverse mortgage, however, and even if you decide that a reverse mortgage is right for your situation you will still need to find the right lender for you. Here is your guide to reverse mortgages, their advantages and disadvantages, and the process for finding the right reverse mortgage lender for you.

Understanding Reverse Mortgages

When you get a reverse mortgage, you are borrowing money from a reverse mortgage lender against the amount of money that your home is worth. There are a number of prerequisites that you’ll have to meet before you can get a reverse mortgage. You must be at least 62, have no mortgage or a low mortgage balance, meet with a counselor appointed by the Department of Housing and Urban Development, and the property being borrowed against must be your primary residence.

Reverse mortgages don’t need to be paid back if you are still using your home as your primary residence. This does mean, however, that you will not be able to sell your house or move to a different residence. In addition, if you want to pass your home onto your children or other heirs, you will need to pay back the reverse mortgage. This also means that your spouse needs to co-sign the reverse mortgage papers, since otherwise you will risk them losing the house if you pass away before them.

Should You Get a Reverse Mortgage?

A reverse mortgage can be attractive for a number of reasons. Getting a reverse mortgage will allow you access to extra funds during your retirement, which will allow you to have a more comfortable lifestyle, pay off any debt you may have, and handle other expenses such as medical care. To get an idea of how much you might be allowed to borrow, use a reverse mortgage calculator such as You won’t have to worry about paying off the reverse mortgage during your lifetime, since it is paid for after your death with the sale of the property in question. You also don’t have to worry about your Social Security and Medicare payments being affected, since a reverse mortgage is a loan and doesn’t count as income for these purposes.

There are, however, some disadvantages. The fees involved in getting a reverse mortgage can be substantial, which is a problem if you don’t already have that money. A reverse mortgage company charges interest on the money you borrow, which can give you less money than you might expect. If you decide to move, the loan will have to be repaid, and you are still responsible for housing costs such as insurance and property taxes. Finally, a reverse mortgage by its nature reduces your children’s inheritance.

Finding the Right Reverse Mortgage Lender

There are a few strategies that can help you find the right reverse mortgage lender for you. One way is by asking several lenders for quotes on their rates and finding one with financially viable interest rates and fees. Often low interest lenders will have a high upfront cost and vice versa, so make sure that you understand the relative cost of paying either upfront or over time in the form of interest.

You should also look into how previous customers have rated a reverse mortgage lender you are considering. Read reviews, check the Better Business Bureau’s website to see any complaints that have been brought against that lender, and make sure that they are a member of the National Reverse Mortgage Lenders Association. Following these tips will ensure that you find a reputable reverse mortgage lender who will be willing to work with you cooperatively.