Getting a reverse mortgage shouldn’t be a decision taken lightly. After all, you’re trading off your home equity for cash. Therefore, you need to make sure it’s going to be the right one for you. Here are some helpful tips to remember when you’re shopping around for the best lender in the area.
Use the funds wisely
What do you plan to spend the money on? If you’re thinking about using the proceeds as a way to acquire investment funds, that might not be a sound financial move to make, according to the National Consumer Law Center, or NCLC. Neither is using the money just to finance your trip around the world or buy luxuries you probably don’t need.
Know where the money will go
Are you planning on remodeling your home? You might have a hard time getting up and down those stairs and wish to make your home senior-friendly. Or you could use it to buy a home that fits your needs better. You could also use the cash from the loan to cover your health insurance costs or if you need to shell out money for long-term care. You can also use it to fund your grandchildren’s tuition or your children’s education. And if you have huge debts, you could use it to pay off those debts and be done with them.
Research and compare
The best way to know if you have a good deal on your hands or not is to always scout around and compare interest rates and costs. Many companies will have closing fees, origination fees along with servicing fees. Pay attention to the reverse mortgage quotes. Put them together in a table or a list to make it easier to spot which ones offer you a great deal.
Ask about repayment
Ask about the Total Annual Loan Cost. You might find yourself needing to repay the loan. It helps to know what the conditions are beforehand.
