Fees coming down on reverse mortgages

The market is finally waking up to the fact that there is money to be made in reverse mortgages, and that is good news for the rest of us. More competition should quickly bring down fees on these useful borrowing tools says the Wall Street Journal.

Most (90%) reverse mortgages today are insured through the federal government. Borrowers pay for that insurance (about 2%), plus 2% of the home’s total value as an “origination fee.” That plus regular closing costs can bring up-front fees up to $12,000 for a $250,000 home. There are also monthly fees

Even with these charges reverse mortgages, which let you take the equity out of your house without moving, can be a better deal than regular mortgages. But relief is on the way, says the Journal. So, they advise, if you can wait a few months before getting a reverse mortgage, it would be smart to do so.

Click here for more on reverse mortgages.

Comments are closed.