These are you options:
1. Monthly income for a fixed term, or life
2. Line of credit
3. Lump sum
4. Any combination of the above 3
- A credit report
- A title report
- An appraisal,
- Lien payoffs
- Current budget
- Monthly income
- Loan risks
- Loan benefits
- Interest rates
- Associated fees
Most of the standard closing costs associated with your Reverse Mortgage can be included in the financing so you do not have to pay them out of pocket. These costs include:
Mortgage Insurance Premiums. This is the insurance that the FHA uses to make the payment guarantees and non-recourse aspects of your reverse mortgage loan. The premium of the HECM is based on if there are any mandatory obligations against the home and of what percent of the benefit. The Insurance fee can either be .5% or 2.5% of the appraised value of your home (not to exceed $636,150), and is paid directly to the FHA insurance fund. These fees are built into the numbers as part of your reverse mortgage loan.
Third Party Charges. You will have very similar costs to that of a normal conventional refinance including appraisal, title search and insurance, surveys, inspections recording fees, mortgage taxes, credit check and other fees. The majority of these can be paid from the loan proceeds.
Origination Fee. Based on FHA and HUD guidelines. This fee is capped at a minimum of $2500 up to $125,000 value, or 2% of the first $200,000, and 1% of the amount over 200,000. Due to our direct endorsement as a lender, we have the ability to be more flexible and reduce off of these set standard guideline fees.
Servicing Fee. This fee is for the maintenance of your account: account statement disbursing loan proceeds and customer service, and is typically $30/month. This is not a fee that you must pay out of pocket. A reserve is set aside at closing for payment of this fee. Any unused portion is reimbursed to the reverse mortgage borrower when the loan is paid in full. At the current time, the products that we offer do not come with any monthly service fees or need to set up any form of additional set aside.
Rates. Rates vary from products and programs that can be chosen. We show a variety of products on our reverse mortgage calculator with a selection of rates to choose from.
Finally, if you are still on the fence – consider this. If there were a bank where the following were true would you invest?
1. You could invest and make subsequent withdrawals, but the account would still appreciate based on the original investment.
2. Withdrawals are free from any penalties.
3. Withdrawals are not subject to taxes in any way.
4. The account is insured to not only guarantee all payments but also protect you and your heirs from any future liability resulting from withdrawing more than your balance.
Your home combined with a reverse mortgage is just such an investment. When you look at it this way, a reverse mortgage makes a lot of sense. Meeting with our Certified Reverse Mortgage Professionals’ can help clear up all of your questions.
Payment Plans Available on a Reverse Mortgage
· Tenure – equal monthly payments for as long as at least one borrower is living in the home as their primary residence. You can learn how much you can get in a free consultation with one of our reverse mortgage specialists.
· Term – Equal monthly payments for a specified period of time
· Line of Credit – an available amount that can be drawn upon until the maximum amount has been reached. Any unused credit line will increase every year giving the borrower more available credit. You can learn how much you can receive in a line of credit or lump sum with our reverse mortgage calculator.
· Modified Tenure – A combination of line of credit and scheduled monthly payments for as long as you live in the home.
· Modified Term – A combination of line of credit and fixed monthly payments for a scheduled period of time.
Payment plan can be modified even after the loan is closed for a nominal fee. The amount you can receive either in a lump sum, line of credit or monthly payment is based upon the age of the youngest borrower, the current interest rate, and the appraised value of your home (not to exceed $636,150).