Reverse Mortgage Costs | Mortgage Refinance

Everyone seems to know about reverse mortgages nowadays. Any senior homeowner over the age of 62 are eligible for a reverse mortgage. Reverse mortgages are being widely promoted through the media.

Older people are diminishing assets, or who face long-term care or other medical expenses that are beyond their capabilities, see reverse mortgages as the only solution to their problems of cash. John Rother, Director of Policy and Strategy AARP (American Association of Retired Persons) says that reverse mortgages may provide a promising way to convert home equity saving cash.

There are a variety of rates and terms associated with a reverse mortgage. Here is a brief on the transaction costs associated with a reverse mortgage.

Let?s take an example that the AARP has come to your newsletter. Say a 74-year-old is more than living in a home for $ 300,000. If you take a reverse mortgage of 12 years, total interest expense can not reach nearly $ 20,000. This includes the initial costs are detailed below:

* Mortgage insurance premium to HUD for $ 6,000.
* Origination Fee charged by the lender $ 6,000.
* Closing costs charged by the broker or the lender $ 2,500.

There are also monthly costs accumulated during the life of the reverse mortgage, it?s maintenance fee of $ 5,000 and a minimum import price of 0.5% monthly interest rate on the loan.

Seniors who choose to ?live in the house? should be aware of these costs that are common with reverse mortgages. For many seniors costs are worth bearing in mind the comfort and security achieved through the payment of the reverse mortgage.

Reverse mortgages can often be attractive option for owners of a main house, even with these costs. Louargand Marco, president of the Real Estate Society of America, said that the combination of today?s real estate and the trends of aging that makes reverse mortgages a desirable proposal. This is because elderly patients who take reverse mortgages do not need to leave home and can enjoy the monthly payments to providers, while living at home.

Older people can use a reverse mortgage calculator that can help you calculate the amount of a loan may be eligible.

This entry was posted on Monday, July 4th, 2011 at 9:18 am and is filed under Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Source: http://nyubi.org/reverse-mortgage-transaction-costs/

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