|
Reverse
Mortgage - Reverse
Mortgage FAQs - Costs
What types of fees are incurred with a reverse mortgage?
Almost every reverse mortgage has an origination fee, which is paid to the
lender for processing the loan. In the case of a HECM,
the lender/broker can charge up to $2,500 if your home is worth less than $125,000.
If the property is valued over $125,000, the lender can charge up to 2% of the
value up to $200,000 and 1% of the amount over $200,000. FHA - HUD regulates
the maximum origination fee at $6,000.00. Lenders also charge a servicing fee
to offset the costs of servicing and maintaining your loan through its maturity.
Typically, servicing fees range from $30-$35 a month.
Other closing costs include third party fees such as an appraisal, title, recording
fees, mortgage taxes, credit checks, surveys, and possibly other items required
by the lender.
The HECM Reverse Mortgage is an FHA insured mortgage, this insurance is often
referred to as MIP or Mortgage Insurance Premium, which can be financed as part
of the loan. Borrowers are charged a 2% MIP upfront at closing. There is also
a monthly MIP that is .5% of the mortgage balance. The FHA insurance insures
the borrower that no matter what happens to the lender your home, equity, line
of credit, monthly payments are all protected.
Most costs can be financed into the mortgage, which
makes it possible for most borrowers to avoid any upfront
expenses.
Other Popular Reverse Mortgage Questions:
What are
some basic qualification parameters?
How much cash
can I get and how do I get paid?
What happens to
my debt and what is the maximum I can owe?
Will
there be anything left for the borrower or their heirs once the property is
sold or the borrower no longer uses the home as their primary residence?
What are some of
the costs associated with reverse mortgages?
Will
receiving payments affect one's Social Security, Medicaid,
or Medicare benefits?
Who
owns the property, the lender or the borrower?
Is it possible
to refinance a reverse mortgage if a better opportunity becomes available?
|
