Reverse Mortgage: How Much Are Closing Costs?

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Services for Real Estate Pros with 206 715 1642 RealEstateAgent | Notary

Closing cost for any reverse mortgage varies- that is the popular answer. Yes, closing costs for reverse mortgage loans vary by lenders and the programs they offer. As far as I know, there are no reverse mortgage loans available that did not have costs associated with them. 

 

Like any other real estate loan, a reverse mortgage loan is generally a prolonged and anxiety-ridden  exercise that involves many steps and procedural formalities. 

Prior to that closing day arrives, a long list of things has to transpire. Along the journey of getting a reverse mortgage- i.e. from required counseling to closing of the escrow, your lender and other third party vendors will have performed several services for the completion of your loan process. Closing costs are mainely fees and expenses that are incurred by these professionals that will charge you for the services they performed for you.

 

In addition to these above costs, there are additional items that you will come across. You can see the detailed items of closing costs in the Loan Estimate document the lender will provide you right after you applied for the reverse mortgage. So every loan process has related costs which the reverse mortgage borrower is obligated to pay for them. 

 

Those who own a house or have a mortgage loan, at least have heard about closing costs. Obtaining a reverse mortgage on your home is not free. Once you submit your application, you will be provided with a loan estimate document in which all the elements related to your loan are shown. Before you finalize the settlement and get the proceeds of the loan,  you will sit down with a reverse mortgage loan signing notary or agent in order to sign all the necessary documents and paperwork. During that time, you will be able to see the final numbers of your closing cost which you should compare with numbers that were given to you in the loan estimate document.

 

Along the journey of getting a reverse mortgage- that is from required counseling to closing of the escrow, your lender and other third party vendors will have performed several services for the completion of your loan process. As you can now imagine, closing costs are fees and expenses that are incurred by these professionals that will charge you for the services they performed for you.  Not to mention, every loan process has related costs which the reverse mortgage borrower is obligated to pay for them. 

 

Each lender has their own rates that they will charge you. Because of this, all the experts recommend that you shop around and compare both the rates and total cost for the whole loan that the lenders are offering . The three types of important costs that you come across at the beginning of the loan process are: Origination Fee, Counseling Fee and Appraisal Fee.  In addition to these, a typical reverse mortgage loan fees that I have come across in my loan signing assignments are fees for: Document preparation, Flood Certification, Mortgage Insurance Premium, Credit Report, Title Insurance, Notary Signing service, Recording, State Tax and shipping Charges.

 

All costs are not to be paid out of your pocket. The only expense items that you will have to pay up front would be Counseling fee and Appraisal charge. In most situations most of these fees and costs are financed and rolled into your loan principal so it becomes part of your loan amount.

 

Closing costs in each State and with each lender will not be the same. As I mentioned earlier, it is to the borrower’s advantage that you compare different fee schedules; get more than two quotes from each  lender and then compare them before selecting the right lender or program for you. 

 

On a federally insured reverse mortgage program by The Federal Housing Administration (FHA) and Home Equity Conversion Mortgage (HECM) program, there is a requirement to 2% as mortgage insurance that you pay out of your pocket. 

 

Please be advised to find a recognized reverse mortgage lender company. Conduct a search of them in the Better Business Bureau. before applying for a loan. 






Posted by

SEESAN, a Licensed Real Estate Agent, Commissioned Mobile Notary specializing in Trust/Estate Planning Signings and Reverse Mortgage Loan Signings for seniors. He uses his expertise, knowledge, and experience to help numerous seniors to maintain their security, independance, and dignity. He is a blogger, a seniors advocate and has many years experience in mortgage loan servicing and real estate industries and has  an MBA in business management. He loves what he does and receives much joy with the services  he provides and benefits seniors and their families receive from them. His services also help reverse mortgage lenders to improve the customer experience by offering excellent signing services. He understands the intricacies of a reverse mortgage transaction, the process, and the documents. He will be your trusted partner to build a signing experience customized for lenders' customers.

One of the primary reasons that lenders for utilizing him  is to provide a convenience to the borrower.  He  makes it possible for the borrower to sign their loan documents wherever it is most convenient for them.  This can be practically anywhere, but it is usually in the comfort of their own home.  This is especially beneficial for Reverse Mortgage borrowers. He  prints the documents, takes them to the borrower, gets the required signatures, then promptly delivers the loan documents.  He takes care of everything for the borrower as well as the lenders. And when he's not covering the reverse mortgage industry, SEESAN enjoys politics, news, movies, comics, soccer games and life with his wife.

He can be reached at seesan2002@gmail.com | cell 206 715 1642 |
HisProfiles: SeesanRealestate  | SeesanMobileNotary

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Disclaimer The materials presented in this article and blog are for informational purposes and are not intended and should not be considered legal or financial advice or a legal opinion on any specific fact or question. There is no attorney-client or other professional-client relationship between the author to this article and the readers or users. The material is as complete and up-to-date as possible as of the date of publication, but the reader should always reconfirm the information with the relevant government agency or consult with an appropriate professional or private attorney or, if unable to afford an attorney, seek free legal or other type of advice.




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Rainmaker
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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

The overall benefit of a RAM Mortgage should out weigh the closing costs for the loan .

May 16, 2020 07:04 AM #1
Rainmaker
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Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is good information to share with prospective mortgage borrowers.

Thank you very much for following my blog. Your comments are always welcome.

May 21, 2020 05:49 AM #2
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Seesan Ed

Real Estate Agent | Mobile Notary in DE
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