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What are the costs associated with a reverse
mortgage?
 Currently,
reverse mortgages charge 4 points to the
consumer or senior. For example, on a
$150,000 reverse mortgage loan, you can
expect to pay $6,000 in fees. Two of the 4
points, or $3,000 of the $6,000, go directly
to the Federal Housing Administration. This
is somewhat like an insurance policy on the
senior so that the value of the loan never
exceeds the value of the home. If it should,
the Federal Housing Administration pays the
difference, and the heirs to the estate have
no liability. The remaining $3,000 (or 2
points) goes to the lender. This is the fee
the lender charges for providing a loan
where NO payments are made for the life of
the loan and as long as the senior lives in
the house.
 There is
legislation proposed to reduce the lender
fee from 2 points to 1 point. Essentially,
in the above example, this would reduce the
lender fee from $3,000 to $2,000. These
fees are the same for all lenders;
therefore, lenders today should only charge
a maximum of 2 points. The other fees
associated with getting a reverse mortgage
today are as follows:
1)
Appraisal
cost generally around - $400
2)
Credit
Report - $25
3)
Flood
Certification - $12.75
4)
Closing
fees - $360
5)
Title
Insurance - (Varies on the loan amount and
appraised value)
6)
Endorsements - $ 350
7)
Recording
Fees - $ 250
8)
Document
Preparation - $ 125
 Worth noting is that the consumer never pays
for these fees out of his/her pocket because
it is added to the loan amount and financed
into the transaction.
Therefore, this becomes a loan with NO
payments. So for the senior looking for
cash to improve their quality of life, help
to pay the rising cost of healthcare or
purchase a new home, a reverse mortgage
becomes quite attractive and serves its
purpose.
Please feel free to call me today
and see if you qualify for a reverse
mortgage.
Bill Pearson
Gateway Funding
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