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Qualifying for a reverse mortgage can seem like a dream come true for many, but like with most financial decisions, it needs to be made carefully and deliberately. A reverse mortgage is a huge financial decision that will substantially influence your financial wellbeing, so learn as much as you can and discuss it with your family and a trusted advisor.
1. Don’t forget this is a loan, and will be charged interest. Make sure you know all the fees you will be paying, including closing costs, origination fees, and mortgage insurance premiums so that you know how much you will really be paying. Talk to your lender to make sure you understand everything.
2. Reverse mortgage loans only use your home equity, so you are only responsible for repaying the actual value of your home.
3. Your loan balance is going to get larger over time, because you aren’t making payments on it.
4. You cannot deduct the interest on your taxes until you pay it, which won’t be until you pay off the loan in full.
5. Find a lender who specializes in reverse mortgage loans,
6. Don’t trust a lender who is trying to pressure you, or who is trying to convince you to buy other products. Find someone you can trust and who you are comfortable with.
7. Compare prices and rates. Lenders will have various specials, so find which one is best for you. You can get a fixed rate or a variable rate, or different rates. Shopping around could save a lot
If you think a reverse mortgage may be for you, or if you have any questions, contact Midland Mortgage today. Midland Mortgage serves 10 states and has been helping homeowners for over 30 years.