Tips When Looking For Reverse Mortgage Lenders
Homeowners who are at least 62 years old have the option to get a reverse mortgage. This option gives them access to their home equity while still living in their home. The additional income can be utilized by the borrower based on his or her needs. These may include home remodels, medical bills, or just to pay off monthly bills. However, before you get this kind of loan, you need to prepare yourself. You need to learn everything there is about reverse mortgage. Provided below are some useful tips when finding a lender.
Closing Costs
The first thing that you have to know is that there are closing costs. Similar to other types of loans, a reverse mortgage comes with closing costs. The Consumer Financial Protection Bureau says that there are mortgage insurance premiums, origination fees, and other related closing costs that you need to be aware of. You need to discuss all these fees with your lender so that you will not be caught off guard in the future.
Loan Balance
Another thing that you have to know is that the loan balance will eventually increase. Because reverse mortgage loans don't need the borrower to make any monthly payments, you cannot expect the principal balance to decrease as time passes by. However, interest is going to be added to the monthly outstanding balance, and that means there will be a noticeable increase in your balance over time.
Interest Rates
Interest rates also differ from one lender to another. Bank Rate said that a reverse mortgage Myrtle Beach might have differing interest rates. Some are issued with a variable or fixed interest rate.