Reverse Mort Company Not Cause of High Closing Costs
What is important to know is that no matter where you live the closing costs for reverse mortgages will be pretty high.
The cost of closing is determined using the value of the home, which is figured by an appraiser. It is generally five percent but can go up to ten if the home value is very low.
As a loan officer I get lots of calls from people who don't know this, and they often blame my company for the brutality of the deal.
You might be thinking that the lender is the reason closing is so expensive. Actually, that is just one factor in the big scheme of things to make this happen.
The whole enchilada is comprised of as much as six or seven different companies. And I'm including the Federal government.
If you look at what is known as a Good Faith Estimate of Costs, you will notice a litany of fees. Only one of these fees is charged by the actual lender. It is known as an origination fee.
Don't get me wrong, the origination fee is still substantial. But it is not the majority of the cost.
Of all closing costs HUD charges the most of any company for homes valued between $100,000 and $417,000. They charge an insurance fee of two percent of value.
FHA can charge up to eight thousand, three hundred and forty bucks, while the bank charges as much as six thousand for origination.
Did I mention this is new law? For some reason the Feds don't mind telling the lender the highest amount they can bill, all the while leaving themselves without a cap.
(Incidentally, if you were called to give money to a campaign as of late and thought you were on the list of people not to call, the legislators happily exempted themselves from that law.)
Where were we? Closing costs. The company issuing the title on the house is responsible for a good portion of the cost, with a number of fees such as a transaction, title insurance, and binder fees.
Then don't forget the appraisal fee for a formal valuation. In some states you have to get the land surveyed as well. That aint cheap.
I don't know about every states specifications, but rest assured there are other little factors that add to costs as well, and as I said in the beginning, the lender isn't the only one to blame.
The cost of closing is determined using the value of the home, which is figured by an appraiser. It is generally five percent but can go up to ten if the home value is very low.
As a loan officer I get lots of calls from people who don't know this, and they often blame my company for the brutality of the deal.
You might be thinking that the lender is the reason closing is so expensive. Actually, that is just one factor in the big scheme of things to make this happen.
The whole enchilada is comprised of as much as six or seven different companies. And I'm including the Federal government.
If you look at what is known as a Good Faith Estimate of Costs, you will notice a litany of fees. Only one of these fees is charged by the actual lender. It is known as an origination fee.
Don't get me wrong, the origination fee is still substantial. But it is not the majority of the cost.
Of all closing costs HUD charges the most of any company for homes valued between $100,000 and $417,000. They charge an insurance fee of two percent of value.
FHA can charge up to eight thousand, three hundred and forty bucks, while the bank charges as much as six thousand for origination.
Did I mention this is new law? For some reason the Feds don't mind telling the lender the highest amount they can bill, all the while leaving themselves without a cap.
(Incidentally, if you were called to give money to a campaign as of late and thought you were on the list of people not to call, the legislators happily exempted themselves from that law.)
Where were we? Closing costs. The company issuing the title on the house is responsible for a good portion of the cost, with a number of fees such as a transaction, title insurance, and binder fees.
Then don't forget the appraisal fee for a formal valuation. In some states you have to get the land surveyed as well. That aint cheap.
I don't know about every states specifications, but rest assured there are other little factors that add to costs as well, and as I said in the beginning, the lender isn't the only one to blame.
posted by Debt Consolidation Loan at
8:17 PM
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