More commonplace than ever reverse mortgages are making their way into the senior community. Maybe it’s famous spokesmen or basic financial trouble that expedites the process.

The reverse mortgage is an exceptable and real financial problem solver if it is used in the right circumstances.

Is it the best possible tool for everyone. If I said yes here you should stop reading and move on. It’s not. I get asked by my clients, “Is this right for me?”

It’s amazing how trusting some people are. God bless them. I am, afterall, a loan officer who makes money only when the loan closes. If you are considering this as option get the facts and make up your own mind.

Well, their question in no way compromises my integrity, and I, in return, ask them as to the length of time they expect to stay at the house before moving. This is the big question.

The reason is closing costs are quite high. If a reverse mortgage borrower sells the home within a short time frame it makes the cost of the loan, on an annualized basis, very expensive.

What I’m looking for is the customer to say, “when I leave it will be with tag on my toe.” Now that’s my kind of customer! The longer the loan goes on the less the loan costs the customer on an annualized basis.

The very minimum acceptable time period, outside of an emergency situation, is three years.

Being in the home for any length of time less than that would be prohibitively expensive, and i may suggest other financial alternatives.

The second point is to look at the relationship between the borrower’s income as it pertains to the problem which the borrower is attempting to solve.

For instance, some incomes can change to catch up to and solve an economic troublespot. Fixed incomes, on the other hand, usuallly cannot. The duration of the financial issue plays a role as well.

So, if the income will not meet the demands of the financial obstacle and the borrower intends to stay in the home for at least three years, and preferrably longer, the reverse mortgage is a viable and intelligent tool.