A Reverse Mortgage Costs between 2.75 to 3.5% Of Your Homes Value (+or -)

Yes, a Reverse Mortgage costs more than a traditional or “forward” mortgage, but not by much. A rule of thumb for a HECM (home equity conversion mortgage) is about 2.75 to 3.5% (plus or minus) of your homes appraised value. (depending on what your lender charges or contributes)

We don’t discount based on your credit score, and we don’t charge more to cover your loan costs.

Brokers (the independents) have more flexibility when it comes to loan costs and charges than Bankers (company employees) because we have more control over what we can pay and what we charge. Most mortgage bankers are paid a certain “%” of the loan amount, or from the origination fee.*

*The Origination fee Is Negotiable. Most brokers can reduce or even waive the $6,000 maximum origination fee. Most bankers can’t or don’t. Always good to know, always good to ask, that’s why I’m letting you know.

A traditional or forward mortgage runs about 2-2.5% of your loan amount. (Depending on your rate, credit score and the lender rebate or credit) A forward mortgage is all about the rate because that is where lenders make their money, and where you end up paying those “lender paid costs.”

Here Is A List Of The Normal Fees We Disclose In A Reverse Mortgage Proposal:

This list is based on a 62 year old borrower who has a home with an estimated value of $500,000. These fee are estimates for this illustration, not a promise to lend or a pre-approval.

Origination Fee: $6,000 (The maximum allowed by FHA. Remember, it’s negotiable)

Flood Certification: $10.50 (you are charged the actual cost, no lender mark-up)

Document Preparation: $170.00 (charged actual cost)

MERS Registration: $24.95 (charged actual cost)

Mortgage Insurance Premium: $10,000 (2% of your homes appraised value. Set by FHA, required and this is the largest fee or cost of a Reverse Mortgage. A one-time expense)

Settlement Or Closing Fee: $250 (charge for dovetailing the closing process)

Counseling Fee: $125 (POC. Paid outside of closing. Local counseling agencies often waive this fee. The national agencies are usually faster but they also charge up to $200 for phone counseling)

OTHER CHARGES:

Appraisal Fee: $720 (charged actual cost)

Credit Report: $48.96 (charged actual cost)

Lender’s Title Insurance: $1,784 (Title companies are regulated and can only charge agreed upon rates)

Notary Fee: $200 (cost can vary depending on the Notary, demand and distance traveled)

Recording Charges Mortgage: $240 (Reverse Mortgages have two deeds of trust, you are charged by the page by the county recorder)

Total Estimated Settlement Costs: $19,573.41

Why We “Overestimate” Your Loan And Settlement Costs.

At Remarkable Reverse Mortgage we overestimate for two reasons:

First, so we can under-promise and over-overdeliver. No surprises, no hidden fees or softening the blow.

Second, if we underestimate or fudge the costs on your application, we have to pay the overage or difference between what we estimated and the actual charge. You won’t get a last minute call saying, “the deal has changed and things are going to cost more than we anticipated.”

That is why it is crucial to get a written estimate and Reverse Mortgage proposal from your lender. You might find that many lenders don’t clearly list the fees and charges in the documents they provide.

If you have something in writing then you can shop your loan to other brokers and bankers, like us. We seldom lose a loan when there is a written proposal to compete and beat. We love to compare apples to apples.

A Few Secrets From Behind The Broker Curtain

This is something we tell all our borrowers. You probably won’t find this elsewhere on the internet or hear it from other insiders but, we make very good money on Reverse Mortgages. Yes, we earn it but you don’t pay us the big money. There is more to this business than meets the eye.

On a forward or traditional mortgage brokers can be paid, or compensated one of two ways: (not both) By the borrower (front end) or by the lender (back end) Borrower paid means you are charged an origination fee. Lender paid means that the broker is paid by the lender.

Both front end and back end compensation is based on your interest rate, financial history and credit score.

We Can Get Paid On The Front-End & The Back-End

On Reverse Mortgages (The adjustable rate loans) we can get paid by you, the borrower (origination fee, front end) and by the lender (back end) Each mortgage company, including Remarkable Reverse Mortgage, has a compensation agreement with each lender we use.

They pay us to find borrowers and to complete the loan process. That is why we get paid the back-end, or “bigger” money. When if comes to paying cost and charging origination, we have a great deal of discretion.

The Beautiful Bottom Line

We can pay or waive fees and costs if we are willing to pay those fees and costs out of our own pockets. At Remarkable Reverse Mortgage we customarily contribute, significantly to each Reverse Mortgage we originate out of our own pockets, or compensation.

If you want to know how much, call us and/or bring us a written proposal from another lender or broker. We love to make a better deal, when we do we all win.

What About A No-Cost Reverse Mortgage?

If you watch and read some of our other blogs and videos you’ll hear us mention deals when we paid for everything. (no-cost reverse mortgage) Over the years we have paid all the allowable costs* on many Reverse Mortgage Refinances. All Remarkable brokers have that discretion and ability.

*There are a few small fees we aren’t allowed to pay

Three Reasons Why We Often Pay For Reverse Mortgage Refinances:

First, because we get paid by the lender, on the back-end, again.

Second, because we don’t have to re-pay the entire 2% Upfront Mortgage Insurance Premium. FHA gives a credit for what was paid the first time around, we pay the extra 2% based on the appreciated value of the property. Well worth it!

Third, because we can. We love doing it.

That is our beautiful bottom line.

Thanks for stopping, looking and listening.

Mark Schmidt 720-206-4539

Remarkable Reverse Mortgage “We Do Colorado Reverse Mortgages”