Taxation & Estate Planning

Reverse Mortgages getting more competitive IF you are a savvy shopper

By Deirdre Wheatley-Liss

The Wall Street Journal recently ran "Reverse Mortgages Look Better" with the premise that the consumers position has changed from learning about reverse mortgages to shopping for the best product for them.  

Upfront fees on reverse mortgages have fallen substantially in recent months, giving homeowners interested in this product a new challenge: how to compare offers to find the best one.

"Quite a few of the lenders now have reduced the origination fees," says Barbara Stucki, vice president of home-equity initiatives for the National Council on Aging. "Some of them are getting rid of the origination fees. Some are willing to pay some of the mortgage-insurance premium fees upfront."

In my prior post "Reverse Mortgage Basics - A Tool to be Reconsidered" I pointed out the amount of the mortgage does not change from company to company - the amount you can get is fixed based on your age, interest rates, and the appraised value of the house.

What you can shop for is how much getting the mortgage is going to cost you.  This is where can you save huge dollars.  If you are considering a reverse mortgage, meet with brokers from at least 3 different companies.  Some of the questions to ask include "What are the fees, in detail".  For more information, AARP has a Reverse Mortgage Guide.

Thanks to Denis Ciklic at Bank of America for bringing the article to my attention.

 Image: jscreationzs / FreeDigitalPhotos.net

Full post as published by New Jersey Estate & Elder Planning Blog on July 06, 2010 (boomark / email).