The Service Set Aside aspect of a reverse mortgage is a portion of the available equity that is put in reserve to cover the costs of maintaining the reverse mortgage. Lenders charge approximately 30 -35 dollars each month for maintaining a reverse mortgage. This fee is based on the amount of the loan and the age of the recipient. The lender determines how many months they will most likely need to manage the loan and set back that amount. Each month they withdraw their maintenance fee from that amount to cover their services.
Do All Reverse Mortgages Have A Service Set Aside Fee Attached To Them?
Not all reverse mortgage programs have a service set aside fee attached to them. These mortgages, however, may have a larger interest rate or closing cost attached to them to make up for the loss of income. Many lenders use the no fee aspect to entice borrowers to use their service. A borrower should compare the cost analysis between interest rate and service fees to see which program will offer them the best deal.
Are There Any Other Fees Associated With A Reverse Mortgage Program?
A reverse mortgage has many fees associated with it, like a regular mortgage, when the application process has begun. Reverse mortgages have closing costs, appraisal fees, document fees and other costs just like a regular mortgage. Once the reverse mortgage has been processed some will require a maintenance fee to be paid each month. These maintenance fees are withdrawn from the available balance before any monthly payments are disbursed. Maintenance fees will be cause the available amount of equity to decrease and may affect your overall monthly payment amounts. A reverse mortgage counselor will provide you with the details before you sign a reverse mortgage contract.
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