MAKE MONEY ONLINE POSTS: AAG Reverse Mortgage Review

الاثنين، 7 أكتوبر 2019

AAG Reverse Mortgage Review

As you shop for a reverse mortgage, you’ll most likely come across American Advisors Group. AAG is everywhere: in brokerage offices, online, on TV. Even Tom Selleck thinks you should go with AAG.

People seem to be listening: Each year, AAG issues more reverse mortgages than any other provider in the nation. But name recognition isn’t as important as your individual needs, so let’s take a closer look at AAG Reverse Mortgages.

Why AAG Reverse Mortgages Have Succeeded

AAG didn’t invent the reverse mortgage. In fact, reverse mortgages had already existed for four decades before AAG got its start back in 2004.

But AAG has been instrumental in making reverse mortgages a mainstream financial product for people aged 62 and older.

AAG Customer Service

This success comes partly from AAG’s solid customer service record. The company’s Better Business Bureau ratings usually range from B+ to A+. Customers on sites like TrustPilot.com and ConsumersAdvocate.com also give AAG high marks.

I seldom hear about bad experiences from people who have gotten an AAG Reverse Mortgage. The company tends to do live up to its obligations, and it charges fees compared with the broader market.

FHA-Backed Loans

AAG Reverse Mortgages have also grown in popularity because the company excels with loans backed by the Federal Housing Administration.

FHA-backed loans have more stringent rules, but they can also cost less overall than privately funded loans. The federal government caps loan origination fees and regulates interest rates, for example.

Great Timing

This confluence of solid customer service and a standardized product line took place right before the first Baby Boomers started turning 62, becoming eligible for reverse mortgages.

That means the first of about 75 million people were poised to become new customers just as AAG came on the scene.

Continuing Innovation

And AAG hasn’t rested on this tried-and-true formula. Instead, the company has continued to innovate its product line.

Now, eligible borrowers can use a reverse mortgage to purchase a separate property or to refinance an existing loan. And AAG doesn’t sell only FHA loans which come with restrictions on how much you can borrow.

A proprietary reverse mortgage from AAG — also known as a jumbo reverse mortgage — could help you unlock even more of your home’s equity.

How Reverse Mortgages Work

Here’s how reverse mortgages work: If you’re 62 or older and own your paid-off (or almost paid-off) home, you could use a reverse mortgage to access part of your home’s equity.

AAG would pay you, say, $250,000 and then own $250,000 of your home’s equity. You could use the $250,000 — minus fees — any way you needed.

You could even pay off your current mortgage if the remaining balance fits within the limits of your new reverse mortgage. You’d continue living in and maintaining the home, and you’d keep paying property taxes and homeowners insurance premiums.

You wouldn’t pay AAG loan payments, but the loan’s entire $250,000 balance would come due if you moved away or sold the home. If you died, your heirs would need to pay off the loan — typically by selling your home.

How AAG Reverse Mortgages Work

Reverse mortgages give you access to the home equity you’ve built up over the years without requiring a regular loan payment. How you access your equity — and how much you will pay — will depend on several variables.

AAG Reverse Mortgage Payout Options

With an AAG Reverse Mortgage, you can borrow from your home equity and receive money as:

A Lump Sum Payout: AAG allows you to borrow up to 60 percent of your equity paid as a single, lump sum. This option can help borrowers who need to pay off other loans or access expensive medical care.
Term Payments: If you need regular income, AAG can pay you regular, monthly payments from your borrowed funds. (This common option gave reverse mortgages their name.) Just remember these payments are funded by a loan that will, someday, need repayment.
A Line of Credit: AAG can use your reverse mortgage to fund a line of credit to use as needed. If you don’t have large, up-front expenses to address but you foresee a need for flexibility in the coming years, you may like this option. Your available funds can even grow as your equity grows.

Additional AAG Loan Options

Along with the standard options above, AAG also offers:

A Jumbo Reverse Mortgage: A customer with a high-value home may want to access more money than a federally backed (HECM) loan will allow. A jumbo reverse (or proprietary reverse mortgage) lets you access up to $6 million. HECM loans top out at $636,150.
A Reverse Mortgage for Purchase: You can use funds from the reverse mortgage on your existing home to invest in another property.

How Much Will an AAG Reverse Mortgage Cost?

With a federal HECM loan, Uncle Sam regulates how much you can borrow and how much you can be charged.

However, you should be familiar with all the fees associated with an AAG reverse mortgage, even if AAG doesn’t charge the fee:

Appraisal Fee: As with any real estate transaction, expect to have your home appraised before finalizing the loan. An appraisal costs anywhere from $200 to $600 and will be passed on to you through the lender.
Closing Costs: Reverse mortgages require closing costs. Titles have to be investigated, attorneys have to file papers, an escrow account may need to be created — and these small costs can add up to a few thousand dollars. Many borrowers pay these fees with funds from the reverse mortgage.
Origination Fee: AAG itself will charge this fee, which will range from $2,500 to $6,000 depending on the value of your loan. This fee can also be paid with funds from your reverse mortgage if necessary.
Mortgage Insurance: Federally backed loans require mortgage insurance. The initial payment, which amounts to 2 percent of your loan, will be due immediately and can be paid with funds from your loan. Then, you’ll owe 0.5 percent of your loan’s balance each year.
Interest: Since you don’t have to make payments on a reverse mortgage, you might forget about the interest. But reverse mortgages do charge interest, and these finance charges will be added to the amount you owe each year. AAG offers fixed and adjustable-rate reverse mortgages with rates comparable to the overall mortgage market.
Service Fees: Like many lenders, AAG charges a $35 monthly service fee for reverse mortgages.

Reverse mortgages, in general, are expensive. You won’t necessarily feel these expenses when you’re using borrowed money to cover them. Eventually, though, you or your heirs will experience these fees as a loss in home equity.

Bottom Line: Is an AAG Reverse Mortgage Worth It?

Because of the fees we’ve just discussed, reverse mortgages shouldn’t be anyone’s first choice for retirement planning. The fees cut away at the equity you’ve built up over the years. But if you need to tap your home’s equity without selling your property or taking on a new monthly payment, a reverse mortgage can be helpful, especially if your home is appreciating in value.

AAG Reverse Mortgages offer solid products, excellent customer service, and a variety of flexible options. If you need a proprietary (or jumbo) reverse mortgage, another lender such as Finance of America (FAR) deserves a closer look.

But AAG sets the standard for federally backed HECM loans. The company offers a free information kit which you should read carefully before proceeding with your loan.

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