Since reverse mortgages are backed by the government and insured by FHA, most lenders offer the same reverse-mortgage programs, but your costs and benefits might not be the same with one lender versus another. With more than 180 reverse-mortgage lenders listed in California – a handful are located in San Francisco – you have several options when it comes to finding a reverse mortgage lender in San Francisco.
To find lenders in your area, you can access a list of reputable reverse mortgage lenders compiled by the U.S. Department of Housing and Urban Development or HUD. On their website HUD.gov, you can find lender information such as name, address, phone, email and experience with reverse-mortgages. Since there are only few lenders in the San Francisco area, it’s wise to expand your search out into surrounding areas.
Interviewing Reverse Mortgage Lenders
As mentioned before, not all lenders are created equally. Not only does customer service differ greatly from one provider to another, the fees you pay may also differ greatly. Reverse-mortgage lenders charge fees including closing costs, filing fees, loan origination fees, monthly service fees and reverse-mortgage insurance fees. By shopping around, you stand to save hundreds in fees alone.
Not only do costs differ from lender to lender, the amount of money you can receive differs as well. You may find that monthly payouts differ by $200 or more depending on the lender you choose. Therefore, it’s best to have all the information before choosing a lender.
Research each lender in your area. Scour their websites, read unbiased reviews, look them up through the Better Business Bureau, ask around … try to find out everything you can about the lenders that interest you. Whittle your list down to seven to 10 potential lenders. Contact each one and interview them. Ask questions regarding the following:
- Interest rates
- Closing costs
- Monthly service fees
- Reverse mortgage insurance
- Borrowing amounts
- Borrowing options
- Programs offered
The total amount you can borrow depends on the value of your home and the program you choose. Reverse-mortgage programs have caps to the amount you can borrow. Although the amount never exceeds the value of your home, it can also not exceed the cap amount, meaning you may not be able to borrow the full value of your home. Cap amounts vary among programs. So, the least expensive program might not be your best option if you need more money or higher monthly payments.
Be sure to research all aspects before making a decision. Taking out a reverse mortgage can be complicated. If you have any questions at all, you can obtain legal counsel through the California Bar Association. Many attorneys are certified reverse-mortgage counselors and can help you sort through the red tape.