How to look for a reverse mortgage?
DDA Mortgage • June 22, 2022
When shopping for a reverse mortgage, there are some things you need to know. First, many lenders offer reverse mortgage loan products but few specialize in them. You want someone who will work with you and guide you through the process so that you can get the best terms possible on your reverse mortgage. Always look for a reverse mortgage specialist.
Some brokers who do not specialize in reverse mortgages don't know that you have several options. You have term options, lump sum options, tenure options, and line of credit options. For more information read our article, Reverse Mortgage Payment Options - What You Should Know. Always know your options.
When looking for a reverse mortgage,
always ask a few questions of your specialists.
- How long have you been in the business?
- How many reverse mortgages have you done?
- Are you a member of a team of experts?
- Can you shop my mortgage to get the best rate, or are you tied to a single lender?
These questions will help you determine the experience of your mortgage broker, the support they have around them, and most importantly are they working for you or for the lender.
If you are interested in learning more about reverse mortgages, give us a call at (727) 784-5555. Or visit our reverse mortgage blog. Click here to go to the blog.
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Wade Pfau, a leading voice in retirement income planning, has long advocated for the strategic use of reverse mortgages —and current market volatility could reignite interest in this often misunderstood tool. 🔁 Why Market Volatility Renews Reverse Mortgage Talks In times of market downturn, retirees face sequence of returns risk , meaning early losses can severely impact the longevity of their portfolio. Pfau suggests that reverse mortgages , particularly Home Equity Conversion Mortgages (HECMs) , can act as a buffer asset to avoid selling investments at a loss. Here's how: During market dips , retirees can pull funds from a reverse mortgage line of credit instead of their investment accounts. This gives their portfolios time to recover before resuming withdrawals. Result : More sustainable income and potentially greater long-term financial security. 🧠 Shift in Strategy: Not Just a Last Resort Pfau argues that reverse mortgages should be considered early in retirement planning , not just as a last-ditch effort: Opening a HECM line of credit early can grow over time due to the compounding credit line. Provides flexibility and tax-efficient access to funds. Helps retirees coordinate income sources between portfolio withdrawals, Social Security, and home equity. 👓 Changing Advisor Perspectives Financial advisors—previously skeptical—are beginning to see reverse mortgages in a new light: Volatile markets have prompted a more open-minded view among planners. More are incorporating reverse mortgages into holistic retirement income strategies . Bottom line : Market volatility doesn’t just threaten retirement—it also opens the door to rethinking traditional strategies . As Pfau puts it, home equity is too significant a resource to overlook, and when used wisely, reverse mortgages can enhance retirement resilience
Are you a salaried employee, hourly, self-employed, or a contractor? Do you receive bonuses, commissions, or overtime? How consistent is that income? Can you provide recent pay stubs, W-2s, or tax returns? Self-Employment (if applicable): How long have you been self-employed? Can you provide two years of business tax returns and profit/loss statements? 🔹 Funds to Close Questions Lenders want to confirm you have enough money to cover the down payment, closing costs, and reserves. Questions may include: Source of Funds: How much money do you have saved for the down payment and closing costs? Where are these funds coming from (savings, checking, retirement account, gift, etc.)? Are you receiving any gift funds? If so, from whom? Asset Documentation: Can you provide bank statements from the past 2–3 months? Are there any large or unusual deposits? Can you explain them? Reserves: Do you have additional savings left after closing (reserves)? Can you show evidence of other assets (stocks, bonds, retirement)? tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
Yes, the reverse mortgage market is projected to experience growth in 2025. Analyses indicate that the market size will increase from $1.79 billion in 2024 to $1.92 billion in 2025, reflecting a compound annual growth rate ( A reverse mortgage can be a useful financial tool for certain homeowners, especially older adults looking to access home equity without selling their home. Here are the key benefits of a reverse mortgage: 🏡 1. Access to Home Equity Without Selling You can tap into your home's equity and receive funds as a lump sum , monthly payments , or a line of credit , without having to sell your home or move out. 👴 2. No Monthly Mortgage Payments Unlike a traditional mortgage, you don’t make monthly payments . Instead, the loan is repaid when you sell the home, move out permanently, or pass away. 💵 3. Flexible Payout Options You can choose how to receive the funds: Lump sum Monthly payments (tenure or term) Line of credit Or a combination This flexibility helps match your financial needs. ✅ 4. Stays in Your Name You retain ownership of your home, and as long as you meet the loan requirements (like maintaining the home and paying property taxes/insurance), you can continue to live there. 🛡️ 5. Non-Recourse Loan You (or your heirs) will never owe more than the home is worth . If the home’s value drops below the loan balance, the FHA insurance (if it's a HECM—Home Equity Conversion Mortgage) covers the difference. 👨👩👧👦 6. Heirs Have Options When you pass away, your heirs can: Repay the loan and keep the home Sell the home and keep any remaining equity Walk away if the loan balance exceeds the home’s value 💰 7. Supplement Retirement Income Reverse mortgages can provide a source of income during retirement, helping cover expenses, delay Social Security, or preserve investments. Would you like a quick rundown of the downsides too, just so you have the full picture?
