Costs, fees, closing costs, interest rates associated with reverse mortgages in Kentucky
All costs and fees associated with a Kentucky reverese mortgage MUST BE DISCLOSED WELL BEFORE YOU CLOSE YOUR LOAN. If they are not disclosed please find another Mortgage Broker or Lender to work with and demand the disclosures up front!
INTEREST RATES: Interest charged on a Reverse Mortgage in Kentucky is on an adjustable rate basis. This means that the Reverse Mortgage interest rate changes; generally it is re-computed on a month to month basis. Remember, the amount that you borrower (your Reverse Mortgage amount) is dependent on your age and equity in your home; the amount of money you receive is not dependent on the interest rate.
FEES: Third Party fees (Fees that are charged to you by outside Vendors) that can be charged on a Reverse Mortgage are generally set and approved by HUD/FHA. Never pay any fees to a Lender, Mortgage Banker, and/or Mortgage Broker upfront. You should receive a detailed analysis of all fees charged. This is called a Good Faith Estimate (GFE). This estimate will show you exactly what you should be receiving as far as the amount of cash you will receive, monthly income and/or your Line of Credit. The GFE on your Reverse Mortgage will also show ALL charges for obtaining your new Reverse Mortgage.
TYPICAL CLOSING COSTS, FEES, CHARGES
- Origination Fee: This fee is charged by the Kentucky Mortgage Broker, Mortgage Banker, or Lender to cover their costs associated with the loan including marketing costs, office overhead, and commissions/salaries to their loan officers. Generally this fee is 2% of the mortgage amount or $2,000 whichever is greater.
- Appraisal Fee: Charged to determine the value of your home : $250-$400
- Flood Certification Fee: Making sure your property is not in a flood zone. $15-$20.
- Document Preparation Fee: Fee to prepare the loan documents. $75-$200
- Title Insurance: Insurance for Lender to make sure your title is clear, free and unencumbered. Approximately $4.00-$5.00 per $1,000 of loan amount.
- Pest Inspection: Makes sure you have no wood boring insects in your home. Cost is approximately $50.00 for the inspection.
- Survey: Plat of Survey shows the legal boundaries of your property. Cost approximately $175-$200.
- Courier Fees: Delivery fees of documents, loan payoffs. Costs approximately $25-$100.
- Recording Fees: Recoding the documents at the court house. Approximately $75-$150.
- Mortgage Insurance Premium: This insurance premium is what insures the following:
- That in the event the Lender who services your loan should go out of business for whatever reason, the government will step in and administer the program.
- It makes sure that you never owe the Lender for any deficiency on the mortgage after the home is sold.
The cost for the insurance premium is approximately 2% of the maximum claim amount, or the value of the home, whichever is less, plus an annual premium thereafter equal to .5% of the loan balance.
All fees associated with your Kentucky Reverse Mortgage can be deducted from your cash out which is the amount of cash that you have available at the time of closing. You will not have to pay for Reverse Mortgage fees up front.
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