A reverse mortgage can be a critical component of your retirement planning, providing funds now and for your future. These funds may provide the freedom to live a more comfortable retirement. However, choosing a reverse mortgage is not a cut-and-dry decision; there are a variety of factors to consider. When choosing the best reverse mortgage broker for your needs, you should consider three things: loan types, costs, and customer service.
Reverse Mortgage
If you are 62 or older, and want to eliminate your mortgage payment, supplement your income, or pay for healthcare expenses, you may be considering a reverse mortgage. Understanding the pros and cons of a reverse mortgage is the first step to determining if it’s the right option for you. A reverse mortgage allows you to convert part of the equity in your home into cash without having to sell your home or pay additional monthly bills. This may seem like a dream, allowing you greater financial freedom in retirement, but there are two sides to most decisions. A reverse mortgage may use up the equity in your home, which could mean fewer assets for you and your heirs. There are many other factors to weigh when considering a reverse mortgage and selecting a reverse mortgage broker, which is why this process can become overwhelming. However, the trusted mortgage advisors at SMPL Mortgage can help you make the right decision tied to your individual needs and goals.
Loan Type
There are a variety of loan types and programs available, so it is important to work with a trusted reverse mortgage counselor who can help you understand all the options and programs that might fit your needs. Broadly speaking, there are three kinds of reverse mortgages: single purpose reverse mortgages (only offered by some state and local government agencies, as well as non-profits); proprietary reverse mortgages – offered by private mortgage firms; and federally-insured reverse mortgages, also known as Home Equity Conversion Mortgages (HECMs). And each lender has their own unique guidelines and options that must be considered. A good Reverse Mortgage Advisor is typically certified to educate on the options and in some cases may also have earned the CRMP designation (Certified Reverse Mortgage Professional). Make sure you are working with a top professional in the industry.
Costs
Reverse mortgage lenders generally charge an origination fee and there are other 3rd party closing costs, and servicing fees over the life of the mortgage. HECMs also charge mortgage insurance premiums; federally backed reverse mortgages have a 2% upfront mortgage insurance premium and annual premiums of 0.5%. Some important financial considerations to keep in mind are that interest rates can change over time. Also be aware that you are still responsible for other costs associated with the home such as property tax and insurance. You also will owe more on the mortgage over time as interest is added onto the balance you owe each month. This means that the amount you owe will grow as the interest on your loan adds up over time.
Customer Service
There is a lot to consider when looking at a reverse mortgage and selecting the right reverse mortgage broker to work with is critical. At SMPL Mortgage we build trust through an educational and hands-on approach that assures the highest integrity throughout the complex process of acquiring a reverse mortgage. Pay attention to a broker’s ratings and reviews online and with the Better Business Bureau. At SMPL Mortgage our client’s experience is our top priority. Through empathy and education, we provide stellar service personalized to the individual circumstances of each client. We take pride in providing this type of quality customer service, and it is what has garnered our firm a top reputation and many positive reviews. For a complimentary consultation, contact SMPL Mortgage here. Our expert team is here to listen to your needs, provide critical information and education, and ensure that we are providing clarity at every step.