Are All Reverse Mortgages Alike?
Three things you must compare when looking at various reverse mortgages.
Many proponents of reverse mortgages emphasize that they truly are a product that will enable senior citizens to maximize their life savings and stay in their home as long as desired. However, all reverse mortgages are not created equal and it is important to compare the following three things.
The Fees Associated with Reverse Mortgages
There are a lot of different fees that may be assessed in conjunction with a new loan, and it is important for consumers to understand any origination or lender charges before signing any paperwork. Any fees will be automatically deducted from the amount of the balance payable to the borrower. Therefore, it is important to select an option that has the lowest possible fees.
The Appraisal Process
Virtually all reverse mortgages require an appraisal of some type, but some lenders may only request a drive-by or desktop appraisal. More expensive home valuations, such as a FNMA or Fannie Mae appraisal, will often be charged to the borrower and may result in less funds being available. On the other hand, the appraisal needs to be as accurate as possible and it is important for a consumer to understand how to dispute the value if necessary.
Payment Terms Offered by Reverse Mortgages
Many reverse mortgages will pay a lump sum to the borrower. However, some loans may actually require that the homeowner receive an annuitized payment on a monthly, quarterly, or annual basis. The amount of funds available may very well depend on the payment terms and length.
All reverse mortgages are not created equal and it is indeed necessary to compare the above three attributes. Some companies may have significantly different lending guidelines, so it is often advisable to check around before agreeing to any specific loan.
Related posts
- What Kind Of Fees Does A Reverse Mortgage Have?
- How Do I Compare Reverse Mortgages?
- How Do I Get My Funds From a Reverse Mortgage?
- Why Should I Invest in a Reverse Mortgage?
- How Do Traditional Mortgages and A Reverse Mortgage Differ?
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