How to Compare Quotes

A reverse mortgage quote, in particular a quote for the FHA insured HECM (Home Equity Conversion Mortgage) should be similar, if not identical, when compared from various lenders, assuming the quotes were issued at roughly the same time.

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Shop Around for Reverse Mortgage Quotes

As a wise consumer, you all ready know that when shopping around for a mortgage loan, getting competitive quotes from various lenders is a prudent thing to do. Getting a reverse home equity quote should be no exception. However, what you should know is that the most popular and widely used reverse mortgage loan, the FHA insured HECM, will offer you almost the identical amount of money and carry the same costs, from oneĀ  lender to another.

Because the HECM is regulated by HUD (Housing and Urban Development) and insured by the FHA (Federal Housing Authority), the government has mandated the maximum loan amounts that all lenders can offer when they issue you a quote. Additionally, the government has placed caps on the loan origination fee and the loan servicing fee that all participating lenders can charge.

click hereThe only variables in a reverse mortgage quote that are under the control of the lenders are the loan origination fee and the loan servicing fee. Although the government has placed maximum caps on these two fees, there is no rule that says that the lenders cannot charge you less when they offer you their quote.

HECM Maximum Loan Amount

If you receive a HECM (Home Equity Conversion Mortgage) quote from more than one lender at the same time, your maximum allowed loan amount should be the same from one lender to the next. The only areas where the quote might vary between lenders, is if one or more of them gets aggressive about competing for your business and reduces their loan origination fee and or their loan servicing fee. Otherwise, your quotes should be an apples to apples comparison, without much variance between them.

In an effort to help you with that “apples to apples” comparison, AARP has developed model specifications for analyzing and comparing reverse mortgage costs and benefits.

If you request a quote from one or more lenders, you may want to make use of the AARP Reverse Mortgage Comparison Tool,so that you are fully informed before you select a lender.

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