June 20, 2024

Jocuri

Mad about real estate

Reverse Mortgage Lenders

Many seniors can greatly benefit from getting a reverse mortgage but many are worried about the charges made against the loan by the reverse mortgage company.
Just like getting a forward mortgage loan or home equity refinancing, you can expect to pay similar costs when you work with a reverse mortgage company. You will have to pay an origination fee, an up-front mortgage insurance premium for the FHA Home Equity Conversion Mortgage (HECM), an appraisal fee, and some other closing costs.
These fees and charges can add significantly to the cost of borrowing against the equity in your home, but the good news is that many of the fees are capped so here’s a breakdown of what you can expect to pay a reverse mortgage company although certain programs may be more or less expensive than the fees listed.
This is what the local reverse mortgage company will charge you in order to cover his expenses and make a large part of his profit on the deal. If you’re applying for a HECM reverse mortgage – and more than 90{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} of people do – the origination fee is equal to the greater of $2,000 or 2 percent of the maximum claim amount and currently the maximum FHA loan amount varies between $200,160 and $362,790, therefore, the 2 percent origination fee generally lies between $4,003 (2 percent of $200,160) and $7,256 (2 percent of $362,790).
This is pretty standard when borrowing money against a home: the reverse mortgage company appoints an appraiser to survey the home to ascertain its value. The appraiser will also make sure there are no major structural defects as any defects must be first fixed at the homeowners expense and a second inspection is then required. Moreover, the original inspection usually costs around $400.

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