Reverse Mortgages - Good Idea, But Which Lender?

By Michael Manfredi

Good Advice from an Expert

Researching Reverse Mortgages can be a daunting task all by itself but how do you know what to look for and who you can trust for good advice? Welcome, I have been a Reverse Mortgage Expert for almost ten years.

There are several factors that have evolved as the most important issues to consider when deciding on a reverse mortgage lender. New federal rules and regulations have lenders operating in a whole new way and as a consumer you must tow the line or be subject to additional scrutiny and possibly even reduced benefits.

Broker or Banker

First there is the age old question of broker or banker. The facts are that brokers have always had the ability to present offers from more than one bank to a consumer and that is a healthy approach to finding the best lender for many reasons. In addition, the new rules and regs force brokers to have more transparency on transactions and provide itemized, detailed charges, up front to a consumer while banks are still allowed to hide fees and credits they receive from secondary sources. But it’s not just about fees anymore. The bottom line is that a broker may represent all of the same banks you are shopping right now and can provide you with more insight as to how those banks underwrite your application. Getting an insider’s advice on the typical underwriting habits of a bank can potentially save you tens of thousands of dollars. Did you know that some banks cut the appraiser’s value, even after you’ve paid for the appraisal? What good is it to apply to the bank with the lowest fees if they cut your benefits by $10,000 or more?

FHA Appraisals

Next there is the appraisal process itself. Reverse Mortgages require FHA (HUD) certified appraisals. FHA appraisals are more costly today and are usually farmed out by banks to the lowest bidder, resulting in a conservative, incompetent or even low-ball appraisal report. FHA appraisals are crucial because only one appraisal can be done every six months on any home with any lender, so it has to be done right the first time and preferably with the right lender.

Lender Overlays

So now you see that shopping for a Reverse Mortgage requires more insight into lender’s practices in addition to just shopping rates and fees. Federal and state rules and regulations are the basis for all of these changes but many lenders have created “overlays” which are company specific rules that they apply,on top of the already stringent guidelines. Talk with an expert about which lender is right for you and your home, before your appraisal is scheduled.

Michael Manfredi is a Reverse Mortgage Specialist. For a free Quote please visit Reverse Mortgage Concepts. Reverse Mortgage Concepts is a reverse mortgage lender located in Phoenix, Arizona.

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