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Are You Paying Too Much for a Reverse Mortgage?

Aug 17, 2007
There are so many mortgage companies out there these days that offer reverse mortgage (RM) loans, but how can you be sure that you're getting the absolute best deal available? An important thing to keep in mind when selecting a RM would be closing costs. You should be aware that at the time this article is being written the typical loan origination fee for the FHA/Monthly ARM program is somewhere in the neighborhood of $6200 to $7200. Again, this is the average fee for this type of program, but it should not discourage you from shopping around for a better value.

By looking into this matter a little more I was able to find a company who had lowered this fee to $3995. (According to my research this would be among the lowest in the country.) Not only does this save you thousands of dollars in closing costs, but it also allows you to get more "bang for your buck" when it comes to the reverse mortgage loan itself.

Now this pricing research was based upon a FHA HECM (Home Equity Conversion Mortgage) reverse mortgage loan, but there are other types of RM programs available. The FHA HECM reverse mortgage loan is one of most popular programs utilized today, but there's also what's called a Fannie Mae Homekeeper reverse mortgage loan. This type of loan has no restrictions on how you may use the money and the funds are tax-free. Another relatively new reverse loan program available is called a Reverse Mortgage Cash Account. This loan is the only RM program that is available as a Zero Closing Cost loan. Yes, you heard it right, a no cost reverse mortgage loan!

So you see there are many options and advantages available when it comes to selecting a RM program. Take time to educate yourself in the ways of reverse mortgage loans so that you can properly discern the correct direction. Also, remember that one of the best things to do is to shop around and get an idea as to what exactly is out there in the realm of reverse mortgages. Most importantly be sure to seek counsel from an educated third party that can evaluate your current situation and determine which loan would ultimately work best for you. Along with many options come many choices and in the end you want to make sure that you are comfortable with your decision and that you have received the best value from the program you choose.
About the Author
Author is a freelance copywriter. For more information on reverse mortgages or California mortgages, visit www.AmeritekMortgage.com.
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