By John Krajsa
AFC Reverse Mortgage
A lot has been said about high closing costs in a reverse mortgage due primarily to the up front initial FHA insurance premium. What is sometimes not pointed out is that, particularly with regard to adjustable rate reverse mortgages, interest rates are low due in large part to the FHA insurance, and low interest charges can offset those insurance premiums over time. It should also be noted that the new Saver program does not have an up-front initial FHA premium, so Saver closing costs are lower. Finally, reverse mortgage closing costs are financed as part of the loan and are not paid out of a homeowner’s savings. The typical reverse mortgage borrower is not required to bring money to closing.
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