“No Costs” Reverse Mortgages

Is that even possible?  The answer can either be “yes” or ” no” because it depends upon the type of loan that is being used and the size of the new mortgage.

In traditional mortgages, by buying up the interest rate, the Lender can utilize credits they receive from the “investor” by passing that along to the borrower.   The borrower does have to be okay with the higher interest rate if they want to do a loan at zero points and/or not pay for any closing costs.

It is the same procedure with a reverse loan.   The higher the rate, the lower the fees and sometimes that results in a “zero” cost loan.   But again, the trade off is a higher interest rate.  If a senior is sensitive about having a higher interest rate, that will result in a larger loan balance in the future, that may not be a good option for them.

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Each borrower has their own personal situation and reasons why they are looking to apply for a reverse loan, and there isn’t any one answer for  them as to whether or not to save on the loan costs by having a higher interest rate, or pay the costs through the new loan, and have a lower interest rate,.

They have to see their options and the details in a professionally prepared loan proposal for their consideration and to personally meet with a Reverse Loan Consultant before they apply for the loan.

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