Lowest closing costs? Best interest rate? What's the best reverse mortgage out there. Well, like most things it depends.
If you're TV shopping you can learn about all sorts of techinical details that mean nothing to the average person sitting on their couch trying to enjoy a show before bed. What most people really care about is do I get the best picture, and how little does it cost? Notice, it's not just how little it costs, it's the relationship between cost and best picture, we'll call this THE VALUE EQUATION. Sometimes, the brand and the reputation of the TV maker may matter as well. This is also a part of THE VALUE EQUATION.
Choosing a reverse mortgage is much more complex than a TV. Isn't it? In some ways, yes. In many other ways it comes down to the same basics, THE VALUE EQUATION.
All too often people google 'best' and what they really mean is 'best value.' We know this because only 1 out of 5 people purchase the lowest cost item. 4 out of 5 people will purchase the best value item. This holds true for any purchase or decision of significance which the reverse mortgage absolutely falls into.
What then really matters in the value equation for reverse mortgages? Let's take a look.
1. RATE - rate is the interest rate we are being charged on the loan. This number is important because it influences what our long term liability is. Think $100,000 owed today is more in 10 years and 20 years, but how much more? It depends on the rate. However, it also very much depends on the type of rate. Is the rate fixed? Is it adjustable? You might be able to get a better adjustable rate, but in a few years it may be a much worse rate than the fixed option that you disregarded simply because it started a little higher.
2. CLOSING COSTS - closing costs are high on reverse mortgages. Not only do we have title insurance (and here in Florida) stamp and intangible tax, we also have FHA insurance premium and plenty of other third party costs. Closing costs can be reduced, perhaps even significantly, but it may actually cause an increase in your rate.
3. OBJECTIVE- believe it or not, people consider reverse mortgages for a variety of reasons. John & Sally are looking to buy a house and thinking about the reverse mortgage as a purchasing tool; Tim and Gina are setting up a line of credit so they have an emergency account set up for down the road. The best loan for John & Sally may not be the best loan for Tim & Gina. John & Sally need a lump sum of money available to use immediately. Tim & Gina on the other hand want an option to utilize the money later in life. The best loan for each of these people may be very different.
4. BRAND - brand is important, not just the corporate brand, but the individual brand of the loan officer serving you. Are you working with a brand name you recognize, that represents integrity and honesty? Are you working with a loan officer that understands your needs and knows the potential challenges and pitfalls. Perhaps, even most importantly, will your loan officer be accessible to you after the loan closes and is their business built on you having the best experience possible.
When it's broken down, THE VALUE EQUATION really isn't all that different between buying a TV and considering a reverse mortgage. The difference is in impact. When you buy a tv, it's easily replaceable. It's not really that big of a decision. Don't like it - well, for a small amount of money you can replace it. A reverse mortgage on the other hand, may very well be the last BIG financial decision you make in your life and you better get it right!
Ok, you agree with me 100%, please actually tell me how to make this decision!
The first step is really the last in THE VALUE EQUATION. The BRAND. Your loan officer needs to be educated in much more than loans. Closing a loan is the most basic service your loan officer can provide, chances are a lot of that is handed off to assistants and processors and underwriters. What I mean to say is, closing a loan is like ordering a pizza on the phone. When your doorbell rings or you show up to the pizza shop, they better have a pizza waiting for you and it really ought to be the pizza you ordered. ANYONE CAN TAKE AN ORDER. A very good loan officer will not just take your order, they will educate you. They'll ask you what you're trying to accomplish, help you identify your needs and clarify your objectives. The best loan officers will advise you, not just on the reverse mortgage but the impact the reverse mortgage has on your life. They'll either have a tremendous level of understanding of retirement planning OR they will have an incredibly strong network of professionals they work alongside that can provide that experience and perspective.
Ultimately the BRAND specifically the individual you choose to work with is going to provide you with the most value, or unfortunately, the worst value. After all, you get what you pay for. If all you want is the absolute lowest cost, the absolute lowest rates, you will by default also get the absolute lowest value when it comes to BRAND & OBJECTIVE.
THE VALUE EQUATION I provide to clients is simple. I have a proficiency in retirement planning that includes over 12 years of specialization in retirement income planning. I sit on boards of multiple financial planning associations and work side by side, every day with some of the best financial professionals across the country. I advise my clients not just on the reverse mortgage, but on retirement, and I do it with the partnership of key trusted advisors. With this expertise we identify the true best structure of the loan for the clients I work with. We provide you the very best results, with the very best care and the very best expertise. We do it all while confidently offering ultra competitive pricing. Our client experience is second to none and it's reflected in our reviews and ratings. Pair that with THE BRAND of Mutual of Omaha and you have an unbeatable VALUE EQUATION giving borrowers The Best Reverse Mortgage.
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Retirement Housing Insighters
Josh Blum
