Forward or Reverse Mortgage - Which one is the right one?

Mortgage and Lending with ClearPath Mortgage Solutions, Inc. NMLS #1394615 NMLS # 423279

Reverse Mortgage, Forward MortgageForward or Reverse Mortgage - Which one is the right one?

Greg called me today from Saratoga, NY. He was referred by a friend of his who is currently in the process of doing a reverse mortgage on his home. He said that he currently had a private mortgage on his condo at 6.5% that had a balloon payment coming due this summer. He was self employed and said his credit was just "ok". He was operating under the assumption that because he was self employed and only had "ok" credit, that getting a regular Mortgage (what we call "Forward Mortgage" in the mortgage world) was out of the question and only a Reverse Mortgage would do. So, when is a Reverse Mortgage the right option and how do you find out?

1. When your home is in foreclosure - Besides a Private Mortgage, a Reverse Mortgage is one of the only ways to take your home out of foreclosures

2. Possibly when you have pending tax liens and judgements against your home that will result in foreclosure - if you have tax liens and judgments that are moving towards foreclosure, the odds are they have affected your credit score pretty drastically.

3. When you are on a fixed income such as social security and you are finding it hard to pay the bills on that limited income and could either use not having a mortgage payment anymore or would like to use some of your hard earned equity to have a better quality of life.

4. When you would like to utilize some of the equity in your home and do not have enough income to qualify for a Forward Mortgage and want to avoid using a co-signer.

5. When you are looking to downsize your current home to a more suitable 1 floor home or condo and do not want to have a mortgage payment again - you can use the Reverse Mortgage to purchase a new home.

The bottom line is your quality of life needs to be increasing… if your qualify of life is good right now, then I would question if a Reverse Mortgage is the right option. Sit with a Mortgage Consultant you trust to show you both a regular Forward Mortgage side by side a Reverse Mortgage and weigh the pro's and con's. Don't be strong armed into a loan that may not be the right fit.

Greg and I are going to be meeting next week to do just that. We'll sit down and compare the two different loans side by side, apples to apples, and may the best loan win!

Posted by

    -Mortgage Consultant for Life


Mike Rankin, NMLS #423279
ClearPath Mortgage Solutions, Inc. NMLS #1394615
950 New Loudon Rd. Suite 231

Latham, NY 12110
Cell:  518-380-4726


Mike Rankin does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comments (3)

Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Mike. It takes a true professional to advice clients what may be best for them when it comes to anything mortgage related. It is easy to understand why you are trusted when it comes to these decisions.

Make it a great weekend!

Apr 04, 2014 07:23 PM
Beth and Richard Witt
Long Island Cash Home Buyer - Center Moriches, NY
Long Island Cash Home Buyer 516-330-6940

Hi Mike... I think folks wondering about what type of mortgage would be best for them would be well served by contacting you before making any decisions...

Thanks for your prayers... my son is doing very well... Happy Day

Apr 08, 2014 12:17 AM
Mark Daly
Group One Mortgage - Jupiter, FL

Hi Mike, I really enjoyed your article and it's content.  Nice job!!

Oct 12, 2015 02:58 AM