Financing in 07306>Question Details

Jen, Both Buyer and Seller in 07306

GFE: GOOD or BAD? Loan 309,375.00 rev mortgage 5.% Origination charge $6100.00 required services $10,399.35 Title services $3,045.00 Jen

Asked by Jen, 07306 Thu Feb 10, 2011

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Jeff Belonger’s answer
for someone that does a lot of reverse mortgages, you have two things incorrect. It isn't common to charge 2 pts, but it is now because of the reverse mortgage pool, which has been hit hard in the last few weeks. Secondly, the origination charge is not off of the appraised value or max loan amount in that county, the MIP is and off the lesser of the two. The lender that this person is speaking to is incorrect because the house appraised for $500,000 and the max loan amount limit is over 700k. So the MIP should be $10,000, not $9,000. This person listed everything below in a comment. But my main point, the MIP is 2% of the appraised value or the max loan amount, the less of the two, And the 2% origination thing? It's 2% of the first 200k for the YSP. And previously that it was common to charge a 2% origination fee? I guess one needs to define previously, because that is misleading to me. Just food for thought.
0 votes Thank Flag Link Sat Feb 12, 2011
3 votes Thank Flag Link Mon Jun 3, 2013
On a reverse mortgage, previously it had been common to charge a 2 point origination fee, however the other thing is that the origination fee is charged on either the full value of the home, or $500,000, or $417,000, depending on whether Hudson County is one where the high balance level is $729,000 or not.
The other thing is that if you are not getting things explained to you properly you should not be taking out a reverse mortgage with that company. You should always know what these fees are for. Most reverse mortgages are the FHA backed HECM loans. If you are taking the amount as a lump sum, then in most cases these days you can get them without the origination charge. Keep in mind, this is not something that you pay, it is just something that accumulates interest and is paid off once the house gets sold, along with the principal taken and the interest that has accumulated on that amount. Also, the only way to get this as a fixed rate is to take it as a lump sum. In most cases, this is not the best way to go. The only reason to take the lump sum is if you want it for a certain purpose. otherwise it is better to get it as a monthly pay out, as interest only accumulates on the amount that has been paid out. Although it seems like a good deal to have it with no closing costs, it is actually not if you realize that you are accumulating interest at the rate of 5% on the full balance even though you may only need a small amount each month. 5% of $309,375 is more than $15,000 per year, which is almost the amount of your total closing costs.
Seeing as I do know a lot about reverse mortgages, and have a specialist in my company that processes all of them for us, I would be happy to speak to you if you would like.
1 vote Thank Flag Link Sat Feb 12, 2011
Typo Correction:

"what you are getting yourself into with a second mortgage"

should read

"what you are getting yourself into with a reverse mortgage"
0 votes Thank Flag Link Sat Feb 12, 2011
Hi Jen,

Although I do not know Robin Silverberg personally, I have read many of her posts here on Trulia, and from what I know of her from these posts, I respect her knowledge & judgement. I would strongly advise you to take Robin up on her offer for a second opinion, so you can be assured of & comfortable with what you are getting yourself into with a second mortgage. There are twists & tuns to this type of loan, you need to be aware of not only the positive side of taking out this type of loan, but also the negative side, as well.

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite and fund, in-house, FHA, 203(k), VA, USDA, Jumbo, Conventional, loans to Canadians, Australians & other Foreign Nationals, on time.
0 votes Thank Flag Link Sat Feb 12, 2011
Robert.. still trying to get a hold of you. Have some important information to pass along to you. Please don't hesitate to call me over the weekend. Even up until 8 pm tonight. 609-440-5133

thanks
0 votes Thank Flag Link Sat Feb 12, 2011
Robert... I never received those sheets. PLease e-mail them to jbelonger@verizon.net


thanks,
jeff
0 votes Thank Flag Link Fri Feb 11, 2011
Hi Jen,

I didn't realize that this was a Reverse Mortgage. This is not my area of expertise, so I really don't have any input here other than to chime in the "better shop around" answer for an originator who is competent in reverse mortgages. They are more expensive than your traditional mortgage.

All the best,
Ros
0 votes Thank Flag Link Thu Feb 10, 2011
Wow, I am amazed how many people answer questions just to "hear themselves" post.
A "reverse VA mortgage" is a new one on me.
Jen how can anyone answer your question in an intelligent manner? We know nothing about you or your property?
Last I checked and it has been a couple of years since I checked last the origination fee according to HUD was the "greater of $2,500 or two percent of the maximum claim amount of the mortgage, up to a maximum claim amount (MCA) of $200,000, plus one percent of any portion of the maximum claim amount that is greater than $200,000. Hud also stated that "lenders may accept a lower origination fee when appropriate. The total amount of the loan origination fee may not exceed $6,000.” I don't know what if anything changed since, it may well have.
I remember reading a few months ago that Met Life was DOING AWAY with origination fees altogether,
Listen you know you have to shop around so go ahead and do just that.
0 votes Thank Flag Link Thu Feb 10, 2011
This is a reverse mortage: appraisal of home came in at $500.00

Loan 309,375.00
Interest rate is 5.00%

Fee:

Adjusted Origination Charges 6,100.00

Settlement Services:
appraisal fee 450.
credit report 16.
flood cert fee 15.
ofac 19.
mortagage insur premium 9,900.00

title services / lender title 3,045.

couseling fee 125.

goverment recording charges 700.

total estimated settlement charges are 20,370.00

any input will help.

thanks jen
0 votes Thank Flag Link Thu Feb 10, 2011
two point origination seems high. Maybe you should get some other quotes.
0 votes Thank Flag Link Thu Feb 10, 2011
Hi Jen,

So, it looks like you are being charged $19,544 in fees to finance this home? Is that correct?

There are many different variables that may be a factor in your costs...

1. Do you know what ype of loan this is? an FHA, VA or Conventional loan?
2. What is the purchase price of your home?
3. What is your credit score?
4. Are you buying a condo or single family home?

Did you choose the title company? RESPA prohibits a seller from requiring the homebuyer to purchase title insurance covering the property from any particular title insurance company, either directly or indirectly, as a condition of sale.

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite and fund, in-house, FHA, 203(k), VA, USDA, Jumbo, Conventional, loans to Canadians, Australians & other Foreign Nationals, on time.
0 votes Thank Flag Link Thu Feb 10, 2011
Jen,

Regarding the comment below... first off, this is a reverse mortgage. Second of all, that company AMeriSave and many others throw low ball rates out there and APR's. Each person is different no matter what. Rates have been changing daily for the worse. besides, they show a 4.5 % rate with an APR of 5%.. that says there are a lot of fees and or points.

thanks,
jeff
0 votes Thank Flag Link Thu Feb 10, 2011
http://www.amerisave.com/ or http://www.aimloan.com/ to get a free online GFE.

This should be your baseline comparison cost estimate on fees. If you can find better lender then you are in good hands.
0 votes Thank Flag Link Thu Feb 10, 2011
Jen,

Bad.... it means that they are charging close to 2 pts. In regards to the required services... I am not sure what those costs are for. I would need to see your whole itemized fee worksheet. Title service charges? That's a lot for just title. Who is the lender?

If you want to talk and or go over these charges, please don't hesitate to call me tonight or e-mail me. I can be reached up until 10 pm on my cell phone. 609-440-5133 and e-mail : jbelonger@ihmci.com

Thanks,
jeff
Area Manager
0 votes Thank Flag Link Thu Feb 10, 2011
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