Steve’s Mortgage Minute – Thoughts on Reverse Mortgages
HUD acts to punish Financial Mortgage
Honolulu-based Reverse Mortgage lender misled elderly, agency contends
I read this news piece over the weekend and felt compelled to give you my thoughts on this situation. Reverse Mortgages are a good program for some borrowers, but not all. In addition, I fear that Reverse Mortgages are the primary way that unethical lenders can take advantage of uneducated borrowers.
The question is, “how can borrowers know if they are making the right decision?”
Here are my answers:
- Work with someone you know or someone with an excellent referral. Check your lender out.
- Ask for references and find out if they are involved in any community programs that indicate a commitment to giving back to the people that keep them in business.
- Get your attorney involved. I always ask my clients if they would like me to provide information to their attorney, CPA or estate planner to ensure that the Reverse Mortgage fits into a bigger plan. This also ensures multiple layers of accountability and thus security for the client.
- Bring a trusted family member to your Reverse Mortgage consultation. If a lender does not like that, then you probably have the wrong lender.
- Reverse Mortgages are slightly more expensive than normal refinance loans, but that does not mean that the loan officer doing the loan needs to double or triple their normal fees. Be careful of lenders who try to make their monthly income off of a single loan!
If you have questions or comments about financing your home, please give us a call at 425.341.2222 or send us an e-mail at stevek@cfundingmortgage.com.