Something to remember: the costs of concluding a reverse mortgage will be lofty. It doesn't make a difference where you reside.
Usually, closing costs are around five percent of the home value, however if the house is considered on the low end in terms of worth, it could be up to 10%.
As a loan officer I get lots of calls from people who don't know this, and they often blame my company for the brutality of the deal.
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.
If you look at what is known as a Good Faith Estimate of Costs, you will notice a litany of fees. Only one of these fees is charged by the actual lender. It is known as an origination fee.
Don't get me wrong, the origination fee is still substantial. But it is not the majority of the cost.
The largest fee, typically, is the FHA mortgage insurance premium. FHA charges two percent of the value of the home up to $417,000.
FHA can charge up to eight thousand, three hundred and forty bucks, while the bank charges as much as six thousand for origination.
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.
(Incidentally, if you were called to give money to a campaign as of late and thought you were on the list of people not to call, the legislators happily exempted themselves from that law.)
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.
Then don't forget the appraisal fee for a formal valuation. In some states you have to get the land surveyed as well. That aint cheap.
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
Usually, closing costs are around five percent of the home value, however if the house is considered on the low end in terms of worth, it could be up to 10%.
As a loan officer I get lots of calls from people who don't know this, and they often blame my company for the brutality of the deal.
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.
If you look at what is known as a Good Faith Estimate of Costs, you will notice a litany of fees. Only one of these fees is charged by the actual lender. It is known as an origination fee.
Don't get me wrong, the origination fee is still substantial. But it is not the majority of the cost.
The largest fee, typically, is the FHA mortgage insurance premium. FHA charges two percent of the value of the home up to $417,000.
FHA can charge up to eight thousand, three hundred and forty bucks, while the bank charges as much as six thousand for origination.
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.
(Incidentally, if you were called to give money to a campaign as of late and thought you were on the list of people not to call, the legislators happily exempted themselves from that law.)
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.
Then don't forget the appraisal fee for a formal valuation. In some states you have to get the land surveyed as well. That aint cheap.
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
