For some, the fees involved in a reverse mortgage are a scary prospect. If you are like most, you have probably heard horror stories, and wonder if you can afford a reverse mortgage.
A reverse mortgage is a good way for seniors to gain access to the financial resources in their homes. A reverse mortgage can make it so that never have to make another payment on your property as long as you’re alive, or as long as you live in the mortgaged house. For many though, reverse mortgages are considered pretty expensive. They tend to have an origination fee of 2%, on top of a government mortgage insurance cost, and other costs like title, escrow, closing, and appraisal. For many, this seems like too much money. For some areas in the country, the cost of a reverse mortgage can equal about $18,000!
When Are These Reverse Mortgage Fees Required to Be Paid Back, And Do You Have Any Options?
Though most of these fees are packaged into the loan for repayment, some of these fees will scare people away. This is unfortunate because, there are many for whom a reverse mortgage would be great for. So before you decide against a reverse mortgage based on these numbers, understand that your reverse mortgage is going to provide you with another source of income. If you have no real plans for the money, you can consider the fees as an expense, and the monies you will receive as profit.
If you planned to take out $180,000 in your reverse mortgage, and have plans for all that money, then you can consider an Independence Plan. These plans have no origination fee, which will help a lot. With an Independence Plan, you will find that the loan is priced so that the originator won’t feel forced to charge you any fees.
In addition, if you are interested in drawing $276,000 or more out with your reverse mortgage, 3rd party fees are waived in addition. Sometimes this happens because the lender will extend credit to help you with the fees.
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