By: Nathan Lawrence
As with any product, financial or otherwise, the appropriateness of the product to the situation that led to the purchase will directly impact the purchasers overall product experience. When it comes to mortgages in general, the type of mortgage product, the reasons behind the need and the overall application should be properly considered and weighed against the alternatives before making a buying decision. When options are presented and considered openly, it should lead to a positive outcome for the borrower.
I’ve have heard the full gamut of reasons as to why Reverse Mortgages are the best thing since sliced bread or the worst thing they have ever experienced. When taking the time to gain a better understanding from people about why they feel either one way of the other, the answers are almost always the same…
Getting a reverse mortgage was a great decision because….It met all of our expectations….Kept us in our house longer, allowed us to travel, help grandkids, or it took the pressure off our monthly budget.
It was the worst idea ever because… we didn’t understand how the product worked and it didn’t completely help us do what we were planning. Yup, that tends to be the main reason….not because of poor service, not because of the lender experience, but because the product simply wasn’t the right fit.
So which is it then? A great product or a not so great product?
Let’s say for a moment that you want to buy a new vehicle, something that you’re going to be driving year round and you settle on buying a Scooter. Scooters are great on gas, easy to drive, low maintenance, simple to park and very inexpensive to purchase…but you completely neglect to consider the fact that you’re Santa and you live at the North Pole. In this case you’re probably going to be unhappy with your purchase. If you live in California on the other hand….you’ll probably love the scooter you purchased.
I find that people often forget that when getting a mortgage they really are purchasing a product/service. They receive the product (the borrowed money) and pay a set price for it (the interest rate).
In the case of a Reverse Mortgage, those who understand the product and have considered the different options available to them are very likely to be very happy with their decision to get a reverse mortgage. WHY?…simply because they educated themselves on the product, made an informed decision and the Reverse Mortgage more than lived up to expectations.
If you are considering any kind of mortgage solution, you should always consider the different options that exist in the market, weight the pros and cons, and make an informed decision.
If you (or a family member) have questions about a Reverse Mortgage, the process or whether it is the right fit for you (or them), please visit www.MortgagesForRetirement.ca or call our team anytime.