Click here to view video

One of the biggest factors or components in a reverse mortgage that you don’t find in a regular or forward mortgage is the upfront Mortgage Insurance premium (MIP). Currently this fee is 2% of the loan amount. This cost is because a reverse mortgage is a non-recourse loan. What that means in layman’s terms is the fact that the borrower will never be responsible for owing more on the mortgage than what the home is worth at the time of sale. That is a good thing! You will only find this MIP charge on a government (FHA) or HUD loan. Other loans such as a jumbo product still contains the non-recourse coverage, but the cost to give you that insurance is rolled into the interest rate. While the closing costs are lower on a jumbo product, it will limit you on the amount you can borrower and the cost of interest onto your loan balance would be higher monthly than a government loan.

Currently another 2% will go towards the Origination Fee. This is how your loan officer and mortgage company will get paid to process, fund and close your loan package. Part of the FHA Modernization Bill about to be presented to Congress is to have the origination fee be capped at 1.5%.

About another 1% will be attributed to regular fees charged in any mortgage process. Appraisal, Credit Report, Flood Certification, Title Insurance, Courier Fees, Recording Fees, etc.

On your closing statement or HUD fee sheet, you may see other charges such as Home Owners Insurance, Property Taxes and pay offs to any current mortgage holders on the property. This will be specific to your transaction and may not be charged for all transactions.

For further information or questions please contact me at 720.641.3482 or bartonkaren@comcast.net

Scam artists are using the new Economic Stimulus package as a means to dupe seniors.

I have spoken with several seniors in the past few weeks telling me they are receiving calls from folks indicating they are from AARP or the IRS. In this conversation they sound very official and convincing. They are telling seniors in order to get their rebate from the Economic Stimulus Act of 2008 they don’t have to go to all the bother of filling out their tax return for 2007. All they need to do is give them their social security number and they’ll do all the work for them on their behalf. This is a scam. Neither AARP nor the IRS is making these phone calls.

There are 2 simple steps in getting your Stimulus Package Rebate:
1. File your 2007 federal tax return
2. Wait for your check to arrive in the mail.

Read the rest of this entry »