Stop Whining to Your Lender About the Reverse Mortgage Costs
Closing a reverse mortgage loan will cost a good bit of money, and place of residence will not affect this fact. This is an essential truth that must be realized.
If you have a very low valued home it can be as much as ten percent of your value. Typically it runs about 5% of your total value as determined by a licensed FHA appraiser.
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.
So, who do we blame when there is no one else to blame? Mostly people like to point their fingers at the mortgage company. Those greedy pigs.
About 7 separate entities make up the entire closing process, the Federal government being one of these.
A closing document called the Good Faith Estimate of Costs separates and shows all of the closing costs, one of which is the origination fee. It is the sole fee from the bank.
Is it sizable? Yes. Does it take up the lions share of cost. No.
The largest fee, typically, is the FHA mortgage insurance premium. FHA charges two percent of the value of the home up to $417,000.
At the highest value of $417,000 FHA can charge over eight thousand dollars in mortgage insurance. The lender can only charge up to $6,000.
Did I mention this is new law? For some reason the Feds don't mind telling the lender the highest amount they can bill, all the while leaving themselves without a cap.
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.
Back to costs. The title or escrow company takes a big chunk of the costs as well, between title insurance, additional binders, and their fee for conducting the transaction.
The appraisal will be listed here as well, along with the costs of a land survey, which is required depending on where you live. The latter can run for quite a bit.
I couldn't talk about states other than Texas, but i imagine someone else is taking a piece as well. Just keep this in mind before you take it out on your loan officer's company.
If you have a very low valued home it can be as much as ten percent of your value. Typically it runs about 5% of your total value as determined by a licensed FHA appraiser.
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.
So, who do we blame when there is no one else to blame? Mostly people like to point their fingers at the mortgage company. Those greedy pigs.
About 7 separate entities make up the entire closing process, the Federal government being one of these.
A closing document called the Good Faith Estimate of Costs separates and shows all of the closing costs, one of which is the origination fee. It is the sole fee from the bank.
Is it sizable? Yes. Does it take up the lions share of cost. No.
The largest fee, typically, is the FHA mortgage insurance premium. FHA charges two percent of the value of the home up to $417,000.
At the highest value of $417,000 FHA can charge over eight thousand dollars in mortgage insurance. The lender can only charge up to $6,000.
Did I mention this is new law? For some reason the Feds don't mind telling the lender the highest amount they can bill, all the while leaving themselves without a cap.
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.
Back to costs. The title or escrow company takes a big chunk of the costs as well, between title insurance, additional binders, and their fee for conducting the transaction.
The appraisal will be listed here as well, along with the costs of a land survey, which is required depending on where you live. The latter can run for quite a bit.
I couldn't talk about states other than Texas, but i imagine someone else is taking a piece as well. Just keep this in mind before you take it out on your loan officer's company.
posted by Credit Counseling at
8:28 PM
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