<\/span>The Fees Involved<\/span><\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Apart from the interest you or your home will owe to the lender upon being sold, there are several other fees associated with reverse mortgages and it is thus important to understand that such loans can prove to be more expensive than they appear to be initially.<\/p>

• Servicing fees<\/b> –\u00a0Your lender may charge you for mailing the account statements and sending you the check every month. The lenders are allowed to charge the borrowers about $30 every month for a fixed-rate mortgage or a mortgage whose interest rate changes only once a year, and about $35 a month for the mortgages with interest rates that are reset each month, according to the government guidelines.\u00a0\u00a0<\/li>
• Origination fee<\/b> –\u00a0A lender can charge you 2% of the first $200,000 of the value of your home and 1% on the amount beyond this $200,000 -or- just $2,500, whichever of the amounts is higher, up to a maximum fee of $6,000.<\/li>
• Mortgage insurance premium<\/b> –\u00a0The government charges the homeowners with FHA loans two insurance premiums in order to reimburse the lender in case the home sells for an amount lesser than the loan amount. These are upfront MIP<\/u><\/a> that is equal to either 0.5% or 2.5% of the appraised value of the home depending on the amount you borrowed in the first year. Apart from this, the borrower must also pay an annual premium equivalent to 1.25% of the loan balance.\u00a0<\/li>
• Closing costs<\/b> –\u00a0The closing costs<\/u><\/a> cover the appraisal fee, title insurance, and the inspection fee. There is no limit to these charges and so it is advisable to shop around and see fees and costs do different lenders pass on to the borrower.\u00a0<\/li><\/ul>

  These costs can add up to a lot without a doubt, and thus experts advise on taking out reverse mortgages as a line of credit rather than a lump sum in order to keep preserve more equity in the home and avoid some unnecessary fees.\u00a0<\/p>

  This way you will only be paying annual insurance premiums and interest on the amount you really need, and it would be even better if you can find a way to alter your spending habits and avoid the loan altogether.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

  About Reverse Mortgages A reverse mortgage essentially helps you turn your home into a source of income without actually putting it up for sale. However, it is always important to know and understand what you… Continue Reading Reverse Mortgages And Its Pros And Cons – The Ultimate Guide<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":6677,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[36],"tags":[47,1422,53,224,1425,1426,225,1424,1423],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.compareclosing.com\/blog\/wp-content\/uploads\/2021\/04\/Reverse-Mortgage-And-Its-Pros-And-Cons-The-Ultimate-Guide.jpg","_links":{"self":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/6667"}],"collection":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/comments?post=6667"}],"version-history":[{"count":25,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/6667\/revisions"}],"predecessor-version":[{"id":6714,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/6667\/revisions\/6714"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media\/6677"}],"wp:attachment":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media?parent=6667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/categories?post=6667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/tags?post=6667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}