How Much Can a Borrower Receive With a Reverse Mortgage?
That is the question a lot of clients seeking information about the reverse mortgage first ask.
In truth, while how much a borrower can receive is an important question, there are many other things that should be considered before giving numbers to potential clients.
This is the difference between speaking with a flesh and blood broker and punching information on a website calculator and hoping to get an exact amount.
One of the misconceptions consumers have about website calculators is that they will give you accurate numbers. In addition, many think that the reverse mortgage is not for them after looking over numbers in a website calculator.
I can’t stress this enough: a calculator is not an accurate representation of the variety of options available using a Reverse Mortgage Loan. A calculator typically only offers one blank program (that may be a more or less accurate representation of the typical reverse mortgage borrower) but it does not, by any means, mold to every borrower’s specific situation who may be looking into getting a reverse mortgage.
In addition, the amount of funds a borrower can receive may be incorrect as borrowers typically input a rough estimate of their home value as well as what they owe on their mortgage (if anything) or other financial obligations. Borrowers may be discouraged by what they see in the website calculator without taking the time to get an accurate quote.
Also, website calculators may include fees (or not include them at all) throwing an otherwise clear-cut and simple quote out of proportion for borrowers. I’ve had many clients who were deterred from taking out a reverse mortgage because of the fees involved (many of which are considerably lower since the changes enacted in October 2013). If the fees are too high borrowers may be weary of even considering the reverse mortgage, without considering that some fees can be adjusted depending on the borrower’s situation.
Lastly, and most importantly, a flesh and blood broker will be able to sit down with a borrower and explain every detail pertaining to the reverse mortgage loan. A calculator cannot explain the program, and many times, end up confusing borrowers more than they were before. The reverse mortgage loan is not less or more complicated than other financial products, but they do require an in-depth explanation and that is something only a broker can do.
Just seeing the numbers will never be enough because a calculator is just a machine, it only does as much as its creator allows it to do. It will give you a rough estimate of the amount of funds available but it will never go over the program line by line. Only a broker can help you find exactly how much you can receive.
So when a borrower wants to know: “how much can I receive with a reverse mortgage?”
I tell them: “let me sit down with you and I’ll be your live reverse mortgage calculator.”
Interested in a reverse mortgage or simply want more information? Give PS Financial Services a call at (888) 845-6630 or via email at info@PSReverseMortgage.com.