Can I get a reverse mortgage if my home is fully paid for? (loan officer, fixed rate)

[howard555]

Originally Posted by TimtheGuy

other than the fees being on the high side compared to a regular mortgage, why?

I had a reverse mortgage rep in my office the other day who stated the upfront fees have gone way down. They used to charge a 2% origination fee and she said that fee is now gone.

So, what are the fees, or interest, or other costs?
The AARP video of a couple showed their fees to borrow were $9,000.

Would anyone know what specific items make up the fees?

You'd have to watch this video to verify the numbers.
Their house appraised for $82,500, loan was $47,560 and fees of $9000.
What You Should Know About Reverse Mortgages, Inside E Street

[TimtheGuy]

Originally Posted by howard555

So, what are the fees, or interest, or other costs?
The AARP video of a couple showed their fees to borrow were $9,000.

Would anyone know what specific items make up the fees?

You'd have to watch this video to verify the numbers.
Their house appraised for $82,500, loan was $47,560 and fees of $9000.
What You Should Know About Reverse Mortgages, Inside E Street

There are not going to be set fees across the nation. Just like a regular mortgage it varies greatly between states as far as costs go. Percentage wise, the costs will always be substantially higher percentage wise on a small loan compared to a larger one (and yes I would call a $47k loan very small). This is true whether it is a regular mortgage or a reverse.

I am guessing a 3rd party like AARP may not have a clue as to what the fees are. Only an actual reverse mortgage lender would have the true numbers.

[TimtheGuy]

Originally Posted by howard555

So, what are the fees, or interest, or other costs?
The AARP video of a couple showed their fees to borrow were $9,000.

Would anyone know what specific items make up the fees?

You'd have to watch this video to verify the numbers.
Their house appraised for $82,500, loan was $47,560 and fees of $9000.
What You Should Know About Reverse Mortgages, Inside E Street

In general terms, I am sure the fees consist of appraisal, title fees (title insurance, closing fee, title search, abstract search, name search, special assessment search) and then the county costs to record a mortgage which vary greatly. There is probably some admin fee as these mortgages often involve a line of credit or annuity type payments and maybe they have to monitor if the borrower is still alive and living in the home. Probably some junk fees like some doc prep or underwriting too.

[MotleyCrew]

I would rather camp in one room with my kids and carry a note on a house that I own free and clean, or downsize to a small studio apartment.

[TimtheGuy]

Originally Posted by MotleyCrew

I would rather camp in one room with my kids and carry a note on a house that I own free and clean, or downsize to a small studio apartment.

That's great. Many people would not want to take that route when they have another option (myself included).

[bookersnook]

Originally Posted by howard555

A video on AARP gave an example. A couple's house was appraised for about $83,000.
The got a loan of about $45,000 and $9,000 went to fees. That's right at 20% in fees.

Those numbers are accurate if the company is charging an origination fee. Most companies do not charge an origination fee.

[fallingwater]

My mother's friend did a reverse mortgage on her home about 6 or 7 yrs ago. I only have a little bit of knowledge about it but it seems to me the bank probably got screwed. Im surprised banks are still even doing this. My mom's friend is single with no kids. She was struggling financially so she did the reverse mortgage. her home was appraised for 40k and they gave her 20k. Seemed like a bad deal at the time however real estate tanked big time in her area. Her street is now littered with empty foreclosed homes. When they do sell, they go for around 5 grand. I guess my mom's friend made out.

[Huckleberry3911948]

here is why.
u can always borrow against the home and then sell later, or u can then later pay off or let it ride--- lots of options.
this is not true of borrowing against the home in case of reverse mortgage. u can no longer convey the property because it is no longer truly yours in a reverse mortgage.
also reverse mortgage puts a limit on what u can or cannot do with the house structurally after u sign. the chance of adding a room or altering existing space and then renting rooms out is gone after u sign reverse mortgage.
reverse mortgage is a one way trip. google it.

[Crazee Cat Lady]

Originally Posted by howard555

I read a definition of a reverse mortgage. It is a loan against the equity in the house and paid back after death, when the house is sold.
I have 100% equity in my house.
Am I eligible for a reverse mortgage?
How to get a loan against the value of my house?

Yes, you could, but you probably shouldn't.
(I know several people who work in finance, and have heard it is a really
bad idea.)

[TimtheGuy]

Originally Posted by Huckleberry3911948

here is why.
u can always borrow against the home and then sell later, or u can then later pay off or let it ride--- lots of options.
this is not true of borrowing against the home in case of reverse mortgage. u can no longer convey the property because it is no longer truly yours in a reverse mortgage.
also reverse mortgage puts a limit on what u can or cannot do with the house structurally after u sign. the chance of adding a room or altering existing space and then renting rooms out is gone after u sign reverse mortgage.
reverse mortgage is a one way trip. google it.

Of course the home is still the borrowers when they have a reverse mortgage, just as much as my home is mine even though I have a conventional mortgage on it. Of course you can still sell your home if you have a reverse mortgage...just like a regular mortgage the reverse mortgage balance would have to be paid off to sell. Of course you can pay off the reverse mortgage, just like you can a regular mortgage.