Reverse Mortgage Lender
Jul
2009
Since the Reverse Mortgage has become a federally regulated program, many people have found themselves asking, “How do I choose the right Reverse Mortgage Lender?” This article will discuss some of the things that will help you in choosing the right lender, the best cost, and the safest choice in whether a Reverse Mortgage is right for you and your families future.
When the FHA and the Department of Housing and Urban Development first took over the Reverse Mortgage industry, the first thing they did was regulate the interest rates of all Reverse Mortgage products for all lenders. Every Reverse Mortgage Lender in the United States has the same interest rate for their Reverse Mortgages. When looking at different lenders, you will not be able to find any rate that will be different. All Reverse Mortgage interest rates are adjustable, however they are tied into very conservative indexes such as the 1-year Treasury bond or the LIBOR index. The adjustment made on these rates are very moderate and you will usually not expect to see a difference 1-2 point difference in the initial rate and the interest rate that it will be at the end of the loan.
The Federal government has also dictated the amount of closing cost that each Reverse Mortgage lender can charge for the Reverse Mortgage that fits your situation most efficiently. This is also a non-disparity between lenders that will not aid you in selecting the right lender to do your Reverse Mortgage. The FHA has allotted that for the most popular product, the HECM, the amount of closing cost will be 2% for origination, and 2% for a mortgage insurance premium. These costs are standard and mandatory. No lender will be able to negotiate or remove these charges to try and earn your business.
So then what is the difference between Reverse Mortgage Lenders? For one, each Reverse Mortgage is serviced by a monthly fee that is escrowed out the Reverse Mortgage proceeds and is automatically debited each month. This allows for no monthly fee to have to be paid by the borrower and is a standard and required facet of every Reverse Mortgage with every Reverse Mortgage Lender. However, the cost of the service fee will be different for many lenders. For the HECM product, for instance, the average monthly service fee is around $35. Some lenders charge more for this fee, some less. Usually the difference in the amount of funds available through this difference in monthly service fee is slight, however it is one thing to consider when looking at different lenders.
The main factor when differentiating between Reverse Mortgage lenders will be your comfort level with the representative you have been conversing with about the product, the quality of the information you receive from the individual, and their level of experience and knowledge of the products and the process. The more polished and experienced the Reverse Mortgage loan officer, the more likely that you will have a much speedier processing time and a much smoother closing with as little difficulty as possible. The time saved when doing a Reverse Mortgage will equate into a much larger savings than a few dollars less on the service fee. Time is money with a Reverse Mortgage and this will be the ultimate key in selecting the Reverse Mortgage Lender that will do the best job for you.
Troy Shellhammer is associated with a nationwide Reverse Mortgage Lender. Reverse Mortgage Nation will provide you access to education material, loan officers nationwide, reverse mortgage information, online calculator, and other consumer benefits.
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