Searching For Great Rates and Fees For Reverse Mortgages In Gladstone Oregon? Here Are The Things You Need To Understand About Interest Rates and Fees For Reverse Mortgage Loans.
Reverse Mortgage Rates in Gladstone OR
Not only will reverse mortgage interest rates in Gladstone vary from lender to lender. Rates will also vary depending on the loan product you choose to utilize. Here is a general guide on shopping for the best rate on a reverse mortgage in Gladstone.
1. Fixed Rate Reverse Mortgage Gladstone – Typically this will have the highest interest rate of all the options you have available. However, it also comes with the least amount of risk as you know exactly how much you will owe on the loan at anytime in the future. The down side to the fixed rate is that you are limited to the amount of equity you can gain access too. Typically the fixed rate loan is used when the reverse mortgage is being used to purchase a home or there is very little or no equity available after paying off the current liens against the property. With the fixed rate option you get a lump sum of cash and that is it.
2. Annual Adjustable Rate Reverse Mortgage Gladstone – Typically this will have the lowest interest rate available. This loan option has caps on the amount the interest rate can rise per annual adjustment and for the life of the loan. Most annual reverse mortgage ARM’s can adjust one time per year and are capped at a maximum adjustment of 2% up or down. They is also a cap rate of 5% above the start rate, this is the highest the rate can adjust. For example, if your start rate was 4% the highest it could ever go would be 9%.
If you have substantial equity or your Gladstone home is paid off. The annual adjustable rate usually makes the most sense. This is because their are multiple ways to gain access to your homes equity. These options include:
- Tenure: equal monthly payments
- Term: equal monthly payments for a fixed period of months as decided by the borrower
- Line of Credit: payments made in installments or at various times and in amounts dictated by the borrower(s)
- Modified Tenure: monthly payments with a line of credit
- Modified Term: monthly payments for a fixed period of months with a line of credit
3. Monthly Adjustable Rate Reverse Mortgage in Gladstone – This interest rate option can be all over the board. It could be lower, the same or higher and the fixes rate and adjustable rate. It all really depends on who you are getting your loan through. However, most people never take this option due to the risks associated with it.
Much like the annual ARM the monthly ARM has cap rates as well. The monthly can adjust on a monthly basis and is capped at no more than a 2% adjustment up or down. The lifetime cap rate is 10% above the start rate. For example if the start rate was 4.5% the highest it could ever go would be 14.5%.
Reverse Mortgage Fees in Gladstone OR
You can pay for most of the costs of a reverse mortgage in Gladstone by financing them and having them paid from the proceeds of the loan. Financing the costs means that you do not have to pay for them out of your pocket. On the other hand, financing the costs reduces the net loan amount available to you.
The reverse mortgage loan includes several fees and charges, which includes: 1) mortgage insurance premiums (initial and annual) 2) third party charges 3) origination fee 4) interest and 5) servicing fees. The lender will discuss which fees and charges are mandatory.
You will be charged an initial mortgage insurance premium (MIP) at closing. The initial MIP will be 2% of the max claim amount. Over the life of the loan, you will be charged an annual MIP that equals 0.5% of the outstanding mortgage balance.
- Mortgage Insurance Premium
You will incur a cost for FHA mortgage insurance. The mortgage insurance guarantees that you will receive expected loan advances. You can finance the mortgage insurance premium (MIP) as part of your loan.
- Third Party Charges
Closing costs from third parties can include an appraisal, title search and insurance, surveys, inspections, recording fees, mortgage taxes, credit checks and other fees.
- Origination Fee
You will pay an origination fee to compensate the lender for processing your HECM loan. A lender can charge the greater of $2,500 or 2% of the first $200,000 of your home’s value plus 1% of the amount over $200,000. Reverse mortgage origination fees in Gladstone are capped at $6,000.
- Servicing Fee
Lenders or their agents provide servicing throughout the life of the reverse mortgage. Servicing includes sending you account statements, disbursing loan proceeds and making certain that you keep up with loan requirements such as paying real estate taxes and hazard insurance premium.Lenders may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate or has a fixed interest rate. The lender may charge a monthly servicing fee of no more than $35 if the interest rate adjusts monthly. At loan closing, the lender sets aside the servicing fee and deducts the fee from your available funds. Each month the monthly servicing fee is added to your loan balance. Lenders may also choose to include the servicing fee in the mortgage interest rate.Servicing fees are not required. Some reverse mortgage lenders will charge them others will not. Some lenders may reduce their origination fee if you opt for the servicing fee. In other words, you may want to shop around to see if you can avoid paying the servicing fee.
In order to get the best reverse mortgage rates in Gladstone you need to shop around. No one single lender or loan officer has the best interest rates at any given time regardless of what they tell you. The same goes for reverse mortgage loan fees as well. In order to pay the lowest reverse mortgage fees in Gladstone you need to shop around and do lots of comparisons.
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