HECM Reverse Loan Costs and Fees
The reverse loan costs and fees are important to understand as you gather information to help you decide if a HECM reverse is right for you. As an effective retirement tool for Oregon seniors, it has attractive features that make it a desirable solution, but as with any financial product, there are fees associated with this loan.
If you are interested, give us a call at: (800) 779-1020 for a confidential consultation or simply use our reverse mortgage calculator to get an instant estimate of loan proceeds available if you do qualify!
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Oregon homeowners, get started today to see how much you may qualify for!
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Important Disclosure
- The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and
- Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees.
- The loan balance grows over time and interest is charged on the outstanding balance
- At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds
- Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment.
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Let’s Examine the HECM Reverse Mortgage Costs & Fees:
Let’s examine the fees and costs associated with HECM reverse mortgages to see how they may be rolled into the loan or deferred until the loan is due and how they may be worth it for qualified Oregon homeowners looking to age in place or to improve their financial flexibility.
Origination Fee – This fee pays for the processing of the loan application, which includes underwriting, appraisal, title search and closing costs. It can run from from 0.5% to 2% of the total loan amount, and equates to $750 to $3,000 on a $150,000 reverse mortgage loan. it’s important to remember that it covers the costs of the loan. As a one-time fee, it is typically rolled into the loan balance, therefore not paid out of pocket.
Mortgage Insurance Premiums (MIPs) – Required on all HECM reverse mortgages, the upfront insurance premium protect both the borrower and the lender by ensuring that the loan can be repaid even if the home’s value declines or if the loan balance ever exceeds the home’s value. The MIP is equal to 2% of the home’s appraised value or the FHA lending limit, whichever is less. On a $500,000 home, the MIP would be $10,000. There is an additional 0.5% annual MIP accrued that is not paid until the end of the loan.
Servicing Fee – Generally between $25 and $35 per month this fee covers the costs associated with loan administration activities like preparing and sending out monthly statements, tracking interest, and fees.
Interest Rates and Fees – Interest rates on reverse mortgages can be fixed or adjustable and may be higher than traditional mortgage rates because the loan balance is not being paid down, over time, which results in compounding interest.
Want to get an immediate estimate of the amount you may qualify for?
By allowing borrowers access to some of the equity in their homes, a reverse mortgage may provide both short term and long term advantages such as eliminating the need to sell their home, make monthly mortgage payments and the ability to age in place. The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home.
Reverse Mortgage Loan Costs and Fees Review
We hope that our list of reverse mortgage loan cost and fees provides a better understanding of what to expect of the costs associated with this home unique loan. Our main goal, as always, is to ensure you have the information you need to make an educated decision about reverse mortgage loans and access to us as a trustworthy local lender.
Reverse mortgages can be a great option for qualified Oregon homeowners looking to improve their retirement income or have additional financial resources that allow them to maintain or improve the lifestyle they’ve earned over years of hard work and sacrifice.
To schedule a free, no obligation discussion about the costs or fees of reverse mortgage loans, the HECM loan qualifications, or to gain a better understanding of how they work, do not hesitate to give our help line a call at (800) 779-1020, we’d love to meet with you at your home or have a talk on the phone to share anything you need to know about the HECM reverse mortgage home loan.
5 Important Things To Understand As You Consider A HECM Reverse Mortgage Loan
1
At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds.
2
Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees.
3
The loan balance grows over time and interest is charged on the outstanding balance.
4
The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home;
5
Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment.