MAKE MONEY ONLINE POSTS: Longbridge Financial Reverse Mortgage Review

الاثنين، 7 أكتوبر 2019

Longbridge Financial Reverse Mortgage Review

Because of federal rules, most reverse mortgages work about the same way no matter where you get one.

So lenders have to find other ways to distinguish themselves in this market.

Longbridge Financial, LLC, gets attention with its easy-to-use web site and online tools, and its strong customer service record.

Let’s take a closer look at Longbridge Financial in this reverse mortgage review as you decide whether to partner with this lender.

About Longbridge Financial Reverse Mortgages

A lot of lenders offer reverse mortgages. Very few exist specifically for the purpose of reverse mortgages.

Longbridge falls into this second category. Founded in 2012 by a group of finance and insurance veterans, Longbridge sought to improve the reverse mortgage experience for seniors entering the marketplace.

To accomplish this, the company’s founders and investors made a commitment to deal with its customers with clarity and transparency.

These kinds of values are difficult to measure. However, we can get a sense of customer satisfaction through sites like the Better Business Bureau, Trustpilot, and ConsumersAdvocate.

All three sources give Longbridge solid marks for consistently providing strong customer service, both for existing customers and potential clients.

Longbridge Financial Pros:

Strong web site and online tools
Solid customer service
Flexible loan payout options

Longbridge Financial Cons:

Limited selection of proprietary loans

Longbridge’s Online Experience Is Strong

A lot of this customer service excellence starts with Longbridge’s web site which is stocked with educational resources and easy-to-use loan-finding tools.

The site has a no-strings-attached info kit which can help you learn a lot about reverse mortgages whether you use Longbridge or another lender.

Longbridge has the best online quote generator in the reverse mortgage market. You can get a reasonably accurate quote by entering your address and a few financial details. This quote can’t be 100 percent accurate since it doesn’t include a hard credit check.

The quote box will show options for Home Equity Conversion Mortgage (HECM) loans endorsed by the Federal Housing Administration.

The quote box will also show other options such as Longbridge’s proprietary reverse mortgage which it markets as a Platinum loan.

Longbridge Financial Reverse Mortgage Options

Most consumers opt for a federally insured reverse mortgage known as a Home Equity Conversion Mortgage (HECM). So we’ll start there.

HECM Reverse Mortgages from Longbridge

Because the Federal Housing Administration and the U.S. Department of Housing and Urban Development regulate HECMs, Longbridge’s options will look similar to other lenders’ choices:

Origination Fees: Reverse mortgage lenders tend to charge hefty loan origination fees, and Longbridge is not an exception. Federal laws limit fees to 2 percent of your loan. No matter the size of your loan, though, your lender can charge as much as $2,500 but no more than $6,000.
Maximum Loan: Also because of federal laws, a lender such as Longbridge can’t loan more than $675,625 through a HECM no matter how much equity you have. Longbridge also offers Platinum loans which can untie up to $4 million in equity; these proprietary loans do not have federal guarantees.
Age Requirements: You must be at least 62 years old to borrow through a reverse mortgage. If you’re applying with your spouse as a co-applicant, your spouse must also be at least 62.
Fixed or Adjustable Rates: Longbridge Financial offers both fixed and adjustable-rate reverse mortgages. An adjustable-rate may help if you’re planning to pay off the reverse mortgage within a couple of years — before the lower, introductory rate expires.
Mortgage Insurance: Federally backed HECMs require the borrower to pay for mortgage insurance. You’ll pay 2 percent of the loan’s value upfront followed by an annual premium of 0.5 percent of your balance. Longbridge’s Platinum loans do not need this insurance.
Closing Costs: As with any mortgage loan, you should be prepared to pay closing costs which include legal fees, appraisals and assessments, escrow fees, and the like.

HECM Reverse Mortgage Payout Options

Many borrowers like to fold most of the above fees and interest charges into the reverse mortgage loan itself.

For example, if you borrowed $300,000 against the equity in your home, you may need to pay $12,000 to $15,000 or so in fees upfront. Rather than paying this out of pocket, you may choose to pay it with funds from your loan.

As a result, your $300,000 would yield only $285,000 to $288,000. Then, each year, your interest charges would be added to this balance.

With Longbridge, you can receive funds from your loan in several different ways:

Lump-Sum Payment: Access 60 percent of your equity in a single, lump-sum payment. This option helps people who need to pay large expenses such as debts or medical bills.
Term Payments: Rather than a lump sum, you can set up recurring payments from Longbridge. Retirees who need a steady flow of income usually opt for term payments.
A Line of Credit: You could turn your Longbridge reverse mortgage into something like a home equity line of credit (HELOC) but without the monthly payments.
A Combination: Longbridge is among a few lenders who allow you to combine the options above. For example, you could get a partial lump-sum payment and use the remaining balance to fund recurring payments or a line of credit.

Additionally, Longbridge offers a “HECM for Purchase” reverse mortgage. This loan can help you use the equity in your current home to make a new real estate purchase. Be sure to plan for closing costs on the new property if you choose this loan.

Platinum Reverse Mortgages from Longbridge

I’ve talked a lot about federally backed HECM loans because they’re growing in popularity. High-value homeowners may not like the limits of these loans.

Longbridge offers this client base its Platinum line of proprietary reverse mortgages. Differences between proprietary and HECM loans include:

No Mortgage Insurance: Proprietary loans aren’t federally guaranteed so you won’t need to pay mortgage insurance premiums.
Higher Limits on Borrowing: Federal limits on HECM borrowing won’t apply to a Longbridge Platinum reverse mortgage. The lender limits loans to $4 million which is more than five times higher than the federal HECM limit.

Repaying Your Longbridge Reverse Mortgage

Some clients I’ve known in the past felt like reverse mortgages let them access their home’s equity with no strings attached.

As you already know from the fees and interest charges we’ve discussed, this isn’t true. At some point, you or your heirs will be responsible for repaying the loan with interest.

It’s true you won’t have to make payments on the debt as long as you own and live in the home. But you will have to repay the loan:

If you move somewhere else: Residing somewhere besides your home for 12 consecutive months will result in the loan coming due. This includes moving into assisted living.
If you sell the home: Ideally you can repay the loan with proceeds from the sale.
If you die: Your adult children or other heirs will need to repay the loan. Ideally, they can use proceeds from your estate or from selling your home to pay back your reverse mortgage.
If you fail to maintain the home: If your home begins to lose value because you aren’t maintaining it — or if you fail to pay taxes or homeowners insurance — your lender can declare the loan due.

Of course, you can repay the loan’s balance whenever you want. Some people even repay the mortgage by getting a regular (forward) mortgage.

Bottom Line: Longbridge Is a Solid Choice

With some advance planning, you can avoid needing a reverse mortgage. Saving and investing when you’re younger can provide a stable source of income later.

Sometimes our best plans and our ideals simply don’t work out. You may find yourself needing a reverse mortgage to alleviate other debt, to address medical issues, or to provide a source of steady income.

So if you’re shopping for a reverse mortgage loan, you may as well get a quality loan.

Longbridge specializes in reverse loans. The lender excels with its online access to loans and its customer care throughout the life of your loan.

The post Longbridge Financial Reverse Mortgage Review appeared first on Good Financial Cents®.