NEW Reverse Mortgage Origination Fee Discounts!
Reverse Mortgage Origination Fee – New Discounts!
Good Day Reverse has added new discounts to the HECM reverse mortgage origination fee! If at anytime you would like to request one of our special offer reverse mortgage quotes you can easily do so by clicking request a special offer quote, or by calling us directly at toll-free: 877-676-6542. Every special offer quote from Good Day Reverse includes various rates and programs highlighted below, so you can see just how the reverse mortgage can work for you. Our goal is to shed some light on the reverse mortgage origination fee, so that you can choose the reverse mortgage program that works best for you!
What is a reverse mortgage origination fee?
What is a reverse mortgage origination fee? Reverse Mortgage origination fees are allowed by HUD to be charged by the lender or broker for the costs of originating and processing the reverse mortgage. This fee is a payment that goes directly to the company originating a reverse mortgage and is paid through the loan at closing. Although the origination fee does not get paid by the borrower out of pocket, it does decrease the net amount of money that a borrower can receive with the reverse mortgage. When qualifying for a reverse mortgage every cost and fee that is applied to the loan is less money the borrower can receive as a lump sum, in a line of credit or as a monthly disbursement. This is why discounting the origination fee can be so important. It not only lowers the initial loan balance, but also offers our borrowers more money.
How is the origination fee calculated?
How this fee is calculated per HUD guidelines can be explained below. A lender or broker can charge the greater of $2,500 or 2% of the first $200,000 of the homes value plus 1% of the amount over $200,000. The cap on the origination fee for a reverse mortgage is $6,000. Typically, this puts the origination fee ranging from $2,500 to $6,000 depending on the appraised value.
Origination Fee Calculation Example:
You own your home and you have applied for a reverse mortgage. The appraised value of your property is received and it comes in valued at $350,000. The origination fee would typically be calculated at 2% on the first $200,000 of value and 1% thereafter. Let’s do the math. 2% x $200,000 = $4,000. Then we need to add the 1% on the remaining value of $150,000, which is $1,500. Total the $4,000 plus the $1,500 and your allowable origination fee is $5,500.
Why do lenders and brokers charge an origination fee?
There are various reasons why a lender or a broker will charge an origination fee, but the main reason is to pay for the costs to originate and process your reverse mortgage loan. There is a considerable amount of time and effort that goes into a company completing a reverse mortgage. Although the origination fee does not pay for tangible items like appraisal, escrow, or title it does pay for things such as compliance, processors, loan originators and any other overhead cost associated to being a reverse mortgage company. This is why an origination fee is sometimes referenced as a lender fee. It pays for costs the lender sees that may not directly be listed on the final HUD-1 being associated with your loan fees.
Why does Good Day Reverse discount the origination fee?
Now that we have explained the general rules of the reverse mortgage origination fee it is time to explain why Good Day Reverse discounts the fee. Good Day Reverse believes that every dollar we can save you is an extra dollar in your pocket. This is why we take the origination fee charges so seriously. We worked hard and were able to accomplish a situation where we could continue to offer our best available programs while offering new discounts on the origination fee for our clients.
View our origination fee discounts for yourself!
All you have to do is request one of our reverse mortgage special offer quotes. This allows us to show you exactly how your reverse mortgage would look with Good Day Reverse. We detail all of our programs and discounts using the information you submit. It is just that easy to get started! If you would like to find out more about our great programs and rates then please jump over to our reverse mortgage interest rates page. We look forward to hearing from you!
Have a Good Day!
Good Day Reverse, Inc is licensed or registered to engage in reverse mortgage loan origination activities in the state of California