Secrets to a Reverse Mortgage
Use Someone You Can Trust
The first, and most important tip, is to know who you are dealing with to get your reverse mortgage loan. As we have all read, there were many unsavory types of mortgage originators involved in the “subprime” lending industry. With the collapse of that industry, many of these originators are now trying to sell reverse mortgages. Typically these folks have gotten into the business in the last 5 or so years and are just looking to make a quick buck.
Beware of out of state originators, some of whom are not licensed in Alabama. You have little recourse if you encounter problems these companies. A reliable originator will be a member of the National Reverse Mortgage Lenders Association (NRMLA) which has its own rigorous standard of ethics.
Reverse Mortgage loans are a great help for many seniors, but like anything else, it doesn’t always turn out that way if a homeowner has the misfortune to deal with someone who doesn’t have the highest ethical standards.
McGowin-King has successfully closed more reverse mortgage in Alabama than anyone and it has been in the reverse mortgage business longer than any other reverse mortgage provider in the State. McGowin-King’s continued success is due to its reputation for honest and competent work that it has earned over the last 16 years. The best thing is that it does not cost any more to use the best. Due to McGowin-King’s experience, they can competently and efficiently close your loan.
Beware of the 1-800 Numbers
Avoid getting drawn in to the television advertisements (those 1-800 number ads) offering a “free video”. These ads seem enticing, after all, who doesn’t want something for free? But you know the old saying: “nothing in life is free”? That applies to these ads. When a senior calls the 1-800 number, they are asked for some personal information: name, birth date, address, financial information, etc. This information is then sold to telemarketing types who then try to sell the senior a number of products. The companies behind these 1-800 ads do not do any background check on who they are giving your information to. And to make matters worse, those parties can re-sell your personal information to whomever they choose.
As Alabama’s most experienced reverse mortgage broker, McGowin-King has worked with lots of seniors who have called and requested the free video, and most of them complain about being “bombarded” by telemarketing calls and unwanted mail solicitations. All the information in these videos is available in a customized format from McGowin-King.
Surveys by FHA and AARP returned a surprising result. Reverse mortgage borrowers express satisfaction with their reverse mortgage at an 88-93% rate. It is rare for 8 to 9 people out of 10 agree on anything!
There are several innovative programs that FHA has introduced in recent years.
- Low Cost HECM – this loan program can dramatically lower closing costs for borrowers who take 60% or less of their money at closing.
- Fixed Rate – depending on the amount and method of the distribution of loan proceeds, borrowers can opt for a fixed rate of interest.
- Adjustable rate with a growing line of credit – Financial advisors and borrowers are starting to realize the investment benefits of the tax-free, guaranteed, growing line of credit.
- HECM for Purchase – this program allows borrowers to use a reverse mortgage to purchase a home under the same FHA program and with the same FHA benefits as the regular reverse mortgage. Many seniors are using the HECM for Purchase program to move into a more livable home, or to be closer to loved ones.