What is important to know is that no matter where you live the closing costs for reverse mortgages will be pretty high.
The cost of closing is determined using the value of the home, which is figured by an appraiser. It is generally five percent but can go up to ten if the home value is very low.
This can hit some borrowers hard when it takes them by surprise. Many times they consider the harshness of the transaction the loan company's fault.
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.
It's still a decent size fee, but it certainly doesn't take up the lion's share of costs.
The culprit behind the bulk of the cost is the mortgage insurance. Two percent of the homes worth (for homes worth $417K and below) is billed to the borrower.
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.
This is newly legislated by the way. I think its funny that the government has no problem capping how much money the lender can make, but they don't cap how much they can charge.
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.
Anyway, another big bite out of the costs comes from the escrow company. They have several fees, including a transaction fee, insurance for the title, and others.
Also add in the official appraisal cost. Sometimes a land inspection is needed as well. These fees are pretty expensive.
I don't know about every states specifications, but rest assured there are other little factors that add to costs as well, and as I said in the beginning, the lender isn't the only one to blame. - 15224
The cost of closing is determined using the value of the home, which is figured by an appraiser. It is generally five percent but can go up to ten if the home value is very low.
This can hit some borrowers hard when it takes them by surprise. Many times they consider the harshness of the transaction the loan company's fault.
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.
It's still a decent size fee, but it certainly doesn't take up the lion's share of costs.
The culprit behind the bulk of the cost is the mortgage insurance. Two percent of the homes worth (for homes worth $417K and below) is billed to the borrower.
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.
This is newly legislated by the way. I think its funny that the government has no problem capping how much money the lender can make, but they don't cap how much they can charge.
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.
Anyway, another big bite out of the costs comes from the escrow company. They have several fees, including a transaction fee, insurance for the title, and others.
Also add in the official appraisal cost. Sometimes a land inspection is needed as well. These fees are pretty expensive.
I don't know about every states specifications, but rest assured there are other little factors that add to costs as well, and as I said in the beginning, the lender isn't the only one to blame. - 15224
