Posted: Wed Dec 28, 2005 3:33 am Post subject: Reverse Mortgage Costs
Costs associated with reverse mortgage are similar to those required for any conventional mortgage. These include origination fee, appraisal fee, inspection fee, title insurance fees, mortgage insurance premiums and other closing fees. In reverse mortgage all these costs can be financed as a part of mortgage.
Some of the reverse mortgage costs are:-
Originating fees- It is paid to the lender for preparing the paperwork and processing your loan.
Third party fees- Third party costs include the fees required at the time of closing of the contract. Third party fees are the appraisal fee, attorney fee, title insurance fee, etc.
Insurance Premium- This type of premium guarantees that you will receive the promised loan amount in advance and you don't have to repay that amount as long as you stay in that house.
Interest- Most of the lenders in the mortgage industry charge adjustable rates on reverse mortgage like home equity conversion mortgage. This implies that the rates can increase or decrease with the passage of time and lenders hardly have any control over the rates (and hence the interest) that they can offer at closing. They also can't predict as to how the rates will change over time.
I am thinking of applying for reverse mortgage and I know that on my age i can qualify for the mortgage. I also found some details on it from your site. But I still have lots to clarify. Can u tell me whom should I approach? Should I consult a lender directly or is there any other way?
Posted: Wed Dec 28, 2005 4:07 am Post subject: RE:
Hi,
It’s good that the information in our site could help you.
If you want, you can definitely consult a lender but it is advised that you meet an independent reverse mortgage counselor before applying for the loan. The lender may speak in favor of his loan programs and it may not be of much help. But the counselor will educate you on reverse mortgage and also inform you about other options that you can consider. He will be the best person to guide you in choosing the most suitable loan package.
Also, make sure that you have all the specific requirements for the loan and ask your lender for a good faith estimate of the costs involved in the reverse mortgage.
Samantha
