Choose your reverse mortgage lender from among those who “dare to compare”

0
40

[ad_1]

The HECM Reverse Mortgage is by far the most difficult financial instrument homeowners can face in their lives, and they have to deal with it after many of them have already reached their intellectual peak. Buying HECM from lenders’ websites is useless because lenders do not provide information to enable users to compare offers from one lender to those of another.

Homeowners seeking HECM can raise funds in four different ways depending on their specific needs. They can get a cash advance, a monthly payment that lasts while they live in their home (“rent”), a monthly payment for a specific period (“urgent payment”), and a line of credit that they can draw on at any time. To shop effectively, homeowners need to be able to compare the amounts offered for the draw option they want.

I recently searched the websites of 24 HECM lenders, including all of the largest, to see what information they provided on the 4 HECM draw options. I found 5 out of 24 lenders who provided information on the amount of cash received, 3 provided information about lines of credit, and not one who provided information on monthly payment options.

The main purpose of all lender websites is to obtain identifying information about the buyer, allowing the loan officer to contact him and start the sale process. HECM’s borrowing decisions are not based on price but on recommendations, advertising, third party support and credibility of loan officers.

However, there is an exception, consisting of 6 creditors who “dare to compare” their terms with those of others. To differentiate them from other HECM lenders, I will call them DTC Lenders. These are all inverse, Goodlife Home Loans, Longbridge Financial, Mid America Mortgage, Mutual of Omaha Mortgage, and Signet Mortgage.

DTC lenders report the terms of their loans on two of my websites (www.mtgprofessor.com and www.kosher-reverse-mortgage.com). The information they provide to potential borrowers is in stark contrast to industry practice:

  • Buyers are not required to identify themselves until they choose from 6 lenders.
  • All 6 lenders provide bets / points / amounts for all available draw options.
  • Ultimately, the buyer can find one DTC lender that offers the best terms on the specific HECM features that best suit their needs.

Disclosure: DTC lenders pay me a small flat sale commission, regardless of whether the loan materializes. Free assistance is provided directly to potential borrowers.

[ad_2]

Source link