Reverse mortgages are growing popular every day. This is a product that allows homeowners to access the equity that over the years they have built up in their houses. In the US, this financial product is only available to senior citizens that are 62 years old or above and have availed retirement from work. Here we have listed three questions that every reverse mortgage lender in Mahwah, NJ should ask the borrower in order to overcome the problem of information asymmetry and moral hazard.
How do you plan to spend the money that you will receive from a reverse mortgage?
This question will give the lender an idea of whether the borrowers really need the money or are they just borrowing it to spend on useless things. This question is important because the lender can identify any red flags by asking the borrower this question.
Have you completely understood your obligations as a borrower?
It is the obligation of the lender to ask this question to the borrower before signing the reverse mortgage agreement. If the borrower is confused or does not completely understand the covenants, then it is the responsibility of the lender to explain it to the borrower to avoid any discrepancy in the future.
For how long do you and your spouse plan to remain in the house?
This question is most imperative because you, as a reverse mortgage lender in Mahwah, NJ, should only sell a reverse mortgage to those buyers who plan to live in the house for the rest of their lives. The house is the collateral of the lender, and thus a lender wants that the owner of the house remains in it and keeps it well maintained.
Longbridge Financial is a reputed reverse mortgage lender in Mahwah, NJ approved by the Federal Housing Administration (FHA). It operates in 46 states and is committed to providing financial peace of mind to the elder generation.