Stop Whining to Your Lender About the Reverse Mortgage Costs
Something to remember: the costs of concluding a reverse mortgage will be lofty. It doesn't make a difference where you reside.
Usually, closing costs are around five percent of the home value, however if the house is considered on the low end in terms of worth, it could be up to 10%.
In my line of work, I talk to borrowers all the time that are not aware of this fact. Sometimes my company even gets the rap for how rough the costs can be.
It's the bank's fault that the costs are so high. Right? Well, I wouldn't say the bank isn't a part of the whole equation, but it's not the whole equation.
The totality of all the closing costs is made up of anywhere from 5 to 9 companies. And don't forget HUD.
If you look at what is known as a Good Faith Estimate of Costs, you will notice a litany of fees. Only one of these fees is charged by the actual lender. It is known as an origination fee.
Don't get me wrong, the origination fee is still substantial. But it is not the majority of the cost.
The culprit behind the bulk of the cost is the mortgage insurance. Two percent of the homes worth (for homes worth $417K and below) is billed to the borrower.
FHA can charge up to eight thousand, three hundred and forty bucks, while the bank charges as much as six thousand for origination.
This is newly legislated by the way. I think its funny that the government has no problem capping how much money the lender can make, but they don't cap how much they can charge.
This is a side-note.. Did you notice all the phone calls wanting campaign donations? Yes, they are excluded from the National Do-Not-Call rules.
Where were we? Closing costs. The company issuing the title on the house is responsible for a good portion of the cost, with a number of fees such as a transaction, title insurance, and binder fees.
Then don't forget the appraisal fee for a formal valuation. In some states you have to get the land surveyed as well. That aint cheap.
I don't know about every states specifications, but rest assured there are other little factors that add to costs as well, and as I said in the beginning, the lender isn't the only one to blame.
Usually, closing costs are around five percent of the home value, however if the house is considered on the low end in terms of worth, it could be up to 10%.
In my line of work, I talk to borrowers all the time that are not aware of this fact. Sometimes my company even gets the rap for how rough the costs can be.
It's the bank's fault that the costs are so high. Right? Well, I wouldn't say the bank isn't a part of the whole equation, but it's not the whole equation.
The totality of all the closing costs is made up of anywhere from 5 to 9 companies. And don't forget HUD.
If you look at what is known as a Good Faith Estimate of Costs, you will notice a litany of fees. Only one of these fees is charged by the actual lender. It is known as an origination fee.
Don't get me wrong, the origination fee is still substantial. But it is not the majority of the cost.
The culprit behind the bulk of the cost is the mortgage insurance. Two percent of the homes worth (for homes worth $417K and below) is billed to the borrower.
FHA can charge up to eight thousand, three hundred and forty bucks, while the bank charges as much as six thousand for origination.
This is newly legislated by the way. I think its funny that the government has no problem capping how much money the lender can make, but they don't cap how much they can charge.
This is a side-note.. Did you notice all the phone calls wanting campaign donations? Yes, they are excluded from the National Do-Not-Call rules.
Where were we? Closing costs. The company issuing the title on the house is responsible for a good portion of the cost, with a number of fees such as a transaction, title insurance, and binder fees.
Then don't forget the appraisal fee for a formal valuation. In some states you have to get the land surveyed as well. That aint cheap.
I don't know about every states specifications, but rest assured there are other little factors that add to costs as well, and as I said in the beginning, the lender isn't the only one to blame.
posted by Debt Consolidation Loan at
8:23 PM
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