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Reverse Mortgages And Fees
Everyone knows that getting a reverse mortgage can be great for your financial situation, but you need to know exactly how much reverse mortgage lenders charge for their services. As with any other mortgage or service, you will need to pay some fees for the paperwork and commissions. These charges are usually the origination fee, the mortgage insurance premium, the appraisal fee and the closing fee.
The origination fee is charged by all reverse mortgage lenders and it covers the costs of a few documents and it includes the profit of your lender. This fee is regulated by the type of program that you choose and it is usually about 2% of the value of your home. However, this sum can be lower or higher depending on the lender and the type of reverse mortgage you decide to take. Another fee charged by reverse mortgage lenders is paid to cover the insurance. For example, the HECM program requires you to insure your loan and it is 2% of the value of your home. When you decide to get a reverse mortgage, you will get an amount directly proportional with the value of your home.
In order to find out the exact value of your property, you will need to hire an appraiser which can be recommended by most reverse mortgage lenders. The appraisal fee is around $400 or less. The last fees that you will need to pay on most reverse mortgages are the closing costs. These fees are small and they are related to a few documents. The total amount that you will have to pay depends on the value of your mortgage but it can be around $200. Most reverse mortgage lenders you offer you the chance to add these fees to the reverse mortgage so you won't have to pay anything upfront.