What is the Perfect Reverse Mortgage Borrower
As a guy who specializes in reverse mortgage lending I obviously get many calls from would-be customers. I listen to their situations, ask questions, and arrive at conclusions.
I certainly don't tell all of them how great the reverse mortgage is for them. It's simply not a great option for all of them.
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.
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.
When getting a reverse mortgage you will receive a disclosure which discusses how the costs reduce as the loan length increases.
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.
Along with a long mortgage period the best reverse mortgage customers are those without the ability to add income to a financial situation which is already under water.
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 conclude we're looking for three things: "they're going to carry me out of the house", non-recoverable financial hardship, and lack of desire to leave inheritance to the kids.
I certainly don't tell all of them how great the reverse mortgage is for them. It's simply not a great option for all of them.
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.
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.
When getting a reverse mortgage you will receive a disclosure which discusses how the costs reduce as the loan length increases.
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.
Along with a long mortgage period the best reverse mortgage customers are those without the ability to add income to a financial situation which is already under water.
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 conclude we're looking for three things: "they're going to carry me out of the house", non-recoverable financial hardship, and lack of desire to leave inheritance to the kids.
posted by Debt Consolidation Loan at
10:43 PM
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