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 don't paint a blue sky picture for each of these potential customers. They are owed truthful advice. And to some I advise to go elsewhere.
It's a bad option for some, a okay option for others, and great option for the remainder. Let's talk about the great ones today.
One of the most important things I like to cover are really two things: Closing costs and length of the mortgage. I want to know the lenght of time the client expects to live in the home.
So, this goes to the questions of the "cost of money". In other words how much is it going to cost this person or couple, over time, to get this loan to solve whatever financial issue they want to solve.
The answer I like best from them is "until i die". This is best as the true cost of the mortgage, on an annualized basis, goes down the longer a customer stays in the home.
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.
It will show various years down the line. You'll notice the further away you get from the day you close the cheaper it is.
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.
Most reverse mortgages are taken out by a customer with a fixed income as described.
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 don't paint a blue sky picture for each of these potential customers. They are owed truthful advice. And to some I advise to go elsewhere.
It's a bad option for some, a okay option for others, and great option for the remainder. Let's talk about the great ones today.
One of the most important things I like to cover are really two things: Closing costs and length of the mortgage. I want to know the lenght of time the client expects to live in the home.
So, this goes to the questions of the "cost of money". In other words how much is it going to cost this person or couple, over time, to get this loan to solve whatever financial issue they want to solve.
The answer I like best from them is "until i die". This is best as the true cost of the mortgage, on an annualized basis, goes down the longer a customer stays in the home.
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.
It will show various years down the line. You'll notice the further away you get from the day you close the cheaper it is.
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.
Most reverse mortgages are taken out by a customer with a fixed income as described.
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.
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