Reverse Mortgage Costs and Fees

What Does It Cost?
The actual costs of a reverse mortgage loan will vary based on many of the same lending variables and expenses associated with a traditional home mortgage (or forward paying mortgage). All reverse mortgages and Home Equity Conversion Mortgages (HECM), include in their list of reverse mortgage expenses, charges for loan origination fees, third party closing costs, real estate appraisal, mortgage insurance and a small monthly lender’s service fee. Your reverse mortgage loan officer can usually arrange for these expenses to be rolled over and paid using proceeds from the reverse loan. That way, the financial burden to the borrower is reversed and the money is paid with interest when the HECM becomes due. However, under no circumstances, will you or your heirs ever be required to pay back more than the home is worth.
The most popular type of reverse mortgage in all 50 states, including California, Hawaii, Puerto Rico and the District of Columbia is the government-insured FHA Home Equity Conversion Mortgage. The FHA reverse mortgage does require the borrower to purchase mortgage insurance protection (MIP) based on 2% of either the property’s appraised value or the lending limit; the lowest MIP calculation is used. However, the interest rates for a HECM loan or other reverse mortgage loan most often will be lower than those rates charged for a traditional home mortgage. The Federal Housing Administration typically sets the lending limit for reverse mortgages on the 1st day of October every year. Reverse mortgage interest rates can be fixed or based of federal government’s one-year T-Bill or the London Interbank Offered Rate (LIBOR). The Federal Housing Administration does require seniors to attend a reverse mortgage counseling session conducted by a HUD-approved counselor prior to completing your application but these sessions are typically FREE of cost to the borrower.
If you would like a detailed estimate of “What Your Reverse Mortgage Will Cost”, contact Trinity Reverse Mortgages today at 1-866-707-4664 for your “No Obligations” free quote.