As American seniors and their families reevaluate their circumstances to plan for the future, a reverse mortgage is an enticing option as a financial supplement. However, a simple internet search will unearth horror stories of senior citizens losing their life savings and an onslaught of reverse mortgage scams. The uptick of illegitimate reverse mortgage frauds is forcing potential borrowers to be vigilant in the selection of their lender.
For homeowners seeking to draw value from the investment in their house, education is imperative. Arming yourself with an understanding of reverse mortgages themselves, as well as gathering a large amount of trusted borrower experiences, will ensure that homeowners can use reverse mortgages to their advantage and secure their financial future.
Understanding the Reverse Mortgage
It is beneficial to begin with the basic understanding of what a reverse mortgage is. According to the National Council on Aging, “A reverse mortgage, sometimes known as a Home Equity Conversion Mortgage (HECM), is a unique type of loan for homeowners aged 62 and older that lets you convert a portion of the equity in your home into cash. But unlike a traditional home equity loan or second mortgage, you don’t have to repay the loan until you either no longer live in the home as your principal residence or you fail to meet the obligations of the mortgage.”
Using this definition as a foundation, homeowners can now begin to search for the best reverse type of reverse mortgage, as well as the ideal mortgage broker for them.
Different Types of Mortgages
There are multiple types of reverse mortgages to consider, and searching through customer reviews of each will help to give context and a deeper understanding of their intricacies. A Home Equity Conversion Mortgage, or HECM, is a federally regulated type of loan that requires a meeting with a HUD-certified counsellor. Proprietary reverse mortgages are similar to HECMs, but do not offer the same government protections. Finally, there are Single-Purpose reverse mortgages where the money from a reverse mortgage can only be used for a specific purpose, such as paying off property taxes and making home repairs.
The Benefits of Customer Reviews
There are extremely detailed explanations available online, but consulting customer reviews of each type of reverse mortgage can make the explanations far more relatable.
The most important time to consult customer reviews, however, is while selecting a reverse mortgage lender. It is through a lender that disastrous scams and loss can occur, so the search must be done carefully. It is recommended to select a lender from the National Reverse Mortgage Lenders Association, created in 1997 to enhance the professionalism of the reverse mortgage business and provide a code of ethics with which to handle all loan transactions. Using the NRMLA as a baseline will provide a solid foundation of trustworthy lenders from which to make your final selection.
Once your list of lenders is created, it is time to begin narrowing down through customer reviews. The best way to avoid being misled by reviews is finding a source that regulates and authenticates them. Below are examples of trustworthy review sources to aid in the final steps of your search.
eKomi is home to a customer feedback management team that moderates reviews for the Reverse Mortgages of America. Every Mortgage of America review is guaranteed to be authentic, as well as both legally and third-party accountable.
eKomi awards their business a metal grade based on their average star review. Reverse Mortgages of America has received the Gold Standard. Achieving such a distinguished status from a trusted review management system will guarantee that homeowners are receiving the best possible treatment during their reverse mortgage process.
Better Business Bureau
Another trusted source is the Better Business Bureau, whose mission is to be the leader in advancing marketplace trust. Any business that appears on the Bureau’s website has already met its strict Accreditation Standards approved by the Bureau’s Board, and all BBB accredited businesses have agreed to live up to their Standards for Trust, “a comprehensive set of best practices for how businesses should treat the public in a fair and honest manner.”
- Lastly, Consumer Advocate provides a completely comprehensive review experience. Through detailed research, Consumer Advocate’s editors “rank the top companies based on factors like price, quality & customer satisfaction,” then take these important qualities and apply them to reviews. Customers will find a balance of editor and customer reviews on the Consumer Advocate’s website. The top reverse mortgage lenders in your area will be displayed with an average star rating of the total number of reviews, and from there potential customers can peruse individual reviews.
Searching and selecting a reverse mortgage can easily seem like a treacherous task, rife with potential scams and cons. If homeowners approach with caution and utilize customer reviews for the valuable tools they are, it is possible to supplement their financial future with a reverse mortgage.
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