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The hard competition in the market of the reverse mortgages has dropped the fees and this has made it possible for many people to keep their homes. The upfront fees, which can be thousands of dollars, are falling, so it is easy to compare the offers. Some lenders in the reverse mortgages market have reduced the origination fees and some are getting rid of these fees totally. Some want to pay the obligatory mortgage insurance up front. This sounds very good to the senior, who has thought to take some of the reverse mortgages. To the market vendors this is also a good PR, because the press and the seniors have blamed them about too high upfront costs, which have made these products expensive. 1. A Possibility To Stay At Home. One of the benefits of the reverse mortgages is, that they allow the seniors to live in their old homes, while tapping a part of their home equities. The ownerships do no change meaning that the seniors can enjoy about the rising property prices. Almost all home types will qualify and the amount they can borrow depends on three factors. On the age of the borrower, on the interest rates and on the appraised value of the home. When the interest rates are low, like today, the long term agreement with a fixed rate can be very good. 2. A Borrower Will Decide The Payment Schedule. The payment schedule depends on the needs a borrower has. The alternatives are one lump sum, monthly payments, a credit line or a combination of some or all of these. It is wise to keep the loan sum as small as possible, so that it only covers the need of the borrower and will leave the rest of the home equity untouched. 3. But Why The Fees Have Dropped? There has happened one important change in the demand of the reverse mortgages. One new buyer group has appeared and they are the investors. They like these loans, because they are very secure ones backed by the FHA, Federal Housing Administration. Every loan has an obligatory mortgage insurance, which is insured by FHA. Under these unstable economic circumstances, they offer stable and secure investment objects. Investors are willing to pay a premium for this security, which have the higher yields. Now the lenders have passed a part of these premiums to the borrowers by reducing the fees. 4. The Offer Comparison Is Time Well Spent. The origination fee can be a few thousands of dollars with a maximum of $ 6.000 and the obligatory mortgage insurance is 2 % of the lesser of the home value or the HECM mortgage limit of FHA for the area, where your home is located. Now some lenders are willing to pay a part or the whole sums from these costs. Taking several offers can bring a nice positive surprise to a senior. Juhani Tontti, B.Sc., Marketing. The reverse mortgages can save your home and your economy. To get the correct advice, please contact the reverse mortgage counselor. Visit: how does a reverse mortgage work
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