Reverse Mortgage Lenders vs. Reverse Mortgage Brokers

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Mortgage and Lending with Shop Reverse Mortgages

This post will be about reverse mortgage lenders vs. reverse mortgage brokers.

When a homeowner over the age of 62 determines they need additional financial resources and only have their home as a source for income, the brain starts to turn. What can one do? After a heavy blitz of TV commercials on reverse mortgages, how do you know who they are? Are they a reverse mortgage lender? A reverse mortgage broker? A reverse mortgage company that sends your information to others?

Reverse Mortgage Lenders vs Reverse Mortgages Brokers

Throughout this section, we will look at the primary differences between both the reverse mortgage lenders and reverse mortgage brokers. There is a large difference of these two professionals. Both can obtain your reverse mortgage but do so in vastly different ways.

Reverse mortgage brokers work with many different lenders. There isn't a set number, so all reverse mortgage brokers are not created equal. To elaborate, if one broker works with 20 different lenders, and another works with 4 different lenders, can you guess which broker could potentially provide more value? Of course, the one who works with the 20 lenders. However, many argue there is a clear downside to working with brokers.That is, the "middle man" fee. Since reverse mortgage brokers are not directly lending the money, how can they get paid for their work? They typically have origination fees which get tacked onto the reverse mortgage loan. It is important to realize that many brokers do receive wholesale pricing, which can rebuttal this claim of a reverse mortgage loan costing more with a broker, than a lender. 

Reverse mortgage lenders work exclusively for the financial institution or bank which actually provides the money. A clear benefit of going this route is you are speaking with the organization that will actually cut the check and they know their product better than any broker. This is because they are not tasked with memorizing guidelines for numerous lenders, only their own. It is for this reason, many argue that you will generally have a "cleaner" experience with a reverse mortgage lenders than with the brokers. However, the downside is the same upside of brokers. They can only give you information on their product, and their product only. They will not be able to compare different products with you as it is in their best interest to paint their financial product offering in a good light. Reverse mortgage lenders will not have any more fees like a reverse mortgage broker may have. 

In our experience, it is up to the consumer to determine which type of professional to utilize for their reverse mortgage loan as each have their inherent benefits. Perhaps it would be best for the consumer to compare reverse mortgage lenders vs reverse mortgage brokers to see the difference for themselves. 

 

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