Carlsbad, CA

Thursday, October 29, 2009

Between one third and one half of all seniors over age 62 are using the Internet according to http://techcrunchies.com Communication with family members and comparative price shopping are two of the biggest reasons for them to go online. Yesterday, a prospective client, after doing some Internet shopping, told me that he could receive several hundred dollars more from another lender using the same FHA/HUD fixed-rate program. As I had heavily discounted the fees for my quotation, I asked him if he could take the time to make certain that it was an 'apple to apple' comparison.

In order to do this, I verified the following with him:

1. Date of birth of the youngest applicant – I've had situations in the past where the

calculation was based incorrectly on the oldest spouse netting the couple more money.

2. Estimated value of the home

3. Amount owing against the home

4. Monthly Servicing Fee

After verifying that we were using the same information, I turned to the good faith estimate to compare the following 4 items:

1. Title and Escrow Fee

2. Appraisal Fee

3. Loan Origination Fee

4. Property Taxes due

By doing this exercise, the mystery was solved. The first lender had not asked the client if their current property taxes had been paid. In the State of California, the first property tax installment is due each year on November 1st and the 2nd is due on February 1st. If either installment is due within 30 days from the anticipated funding date, the payment should be included in the estimate.

If a senior is thinking about taking out a reverse mortgage, it only makes sense to shop. If I were a client, I'd ask the loan officer with whom I was talking to forward me a product comparison sheet and the good faith estimate before proceeding. The moral of this story is to make sure you are getting the whole picture when shopping Of course, not all reverse mortgage lenders are created equal, and some may not give you all the facts. It a senior selects the right lender, it is possible to get the best pricing and exemplary service.

Ken Keranen

Reverse Mortgage Specialist

Legacy Home Financing

Carlsbad, CA

800-747-8006