Who is the Quintessential Reverse Mortgage Customer
As a loan officer working exclusively with reverse mortgages, I speak to many prospective borrowers on a weekly basis. I'm always in the process of evaluating them as real customers.
I'm not in the business of making a big magnet of myself and trying to get all of them to work with me. The fact is some simply shouldn't, and I tell them so.
The reverse mortgage is a poor choice for some, 50/50 for some, good for some, and a great choice for the rest. I wish to tackle the latter group.
Closing costs are expensive for these mortgages. As such I'm very interested to know the time frame a senior plans on residing in the home.
What I'm trying to get at with my customer is if the cost to get the mortgage will be worth it to them. They have to understand that solving their financial issue will have a cost to it. Will the results be worth the costs?
The best answer I can hear is "forever". I like that because the longer someone stays in the home the cheaper the reverse mortgage gets over time.
At loan application you would receive, from you lender of choice, a disclosure outlining how the mortgage reduces in cost, on an annualized basis, the longer the mortgage lasts.
The disclosure gives snapshots of the annual cost of the mortgage over various years. You'll see how cost reduces over time.
Another perfect candidate is someone who simply can't make due on the income they have. Due to economic or health reasons they simply cannot do it on their income.
Fixed incomes play an important role in making up the perfect reverse mortgage customer.
I'd say the final attribute of the perfect candidate is that of not having a vital interest in leaving a large inheritance to the kids. This group is thinking about the rest of their own lives rather than the rest of their kids lives.
Some people are dead set on leaving as much as possible to the kids. Reverse mortgages rarely sit well with these folks because the interest is constantly working against the equity in the home.
To sum up a great reverse mortgage cadidate, we are looking for an attidute of us first, kids second; static income which isn't enough; and an extending mortgage period hopefully as long as the borrower lives.
I'm not in the business of making a big magnet of myself and trying to get all of them to work with me. The fact is some simply shouldn't, and I tell them so.
The reverse mortgage is a poor choice for some, 50/50 for some, good for some, and a great choice for the rest. I wish to tackle the latter group.
Closing costs are expensive for these mortgages. As such I'm very interested to know the time frame a senior plans on residing in the home.
What I'm trying to get at with my customer is if the cost to get the mortgage will be worth it to them. They have to understand that solving their financial issue will have a cost to it. Will the results be worth the costs?
The best answer I can hear is "forever". I like that because the longer someone stays in the home the cheaper the reverse mortgage gets over time.
At loan application you would receive, from you lender of choice, a disclosure outlining how the mortgage reduces in cost, on an annualized basis, the longer the mortgage lasts.
The disclosure gives snapshots of the annual cost of the mortgage over various years. You'll see how cost reduces over time.
Another perfect candidate is someone who simply can't make due on the income they have. Due to economic or health reasons they simply cannot do it on their income.
Fixed incomes play an important role in making up the perfect reverse mortgage customer.
I'd say the final attribute of the perfect candidate is that of not having a vital interest in leaving a large inheritance to the kids. This group is thinking about the rest of their own lives rather than the rest of their kids lives.
Some people are dead set on leaving as much as possible to the kids. Reverse mortgages rarely sit well with these folks because the interest is constantly working against the equity in the home.
To sum up a great reverse mortgage cadidate, we are looking for an attidute of us first, kids second; static income which isn't enough; and an extending mortgage period hopefully as long as the borrower lives.
posted by Debt Consolidation Loan at
11:02 PM
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