Reverse Mortgage Guide

Like the U.S., Australia has reverse mortgages and like the U.S. fees and charges vary enormously.

Australia’s Investor Daily says a new study found that minor differences in reverse mortgage fees and charges could produce big cost differentials for borrowers.

How big?

Hold on to your wallet.

“A report from broker Seniors First Finance found large discrepancies in the interest and fees charged by different lenders servicing the $1 billion market.

“In one example, an interest rate of 9.07 per cent with monthly fees of $12 on a loan of $100,000 would incur a total cost of $525,000 over 20 years.”

And, says the newsletter:

“This was $107,000 more than the same loan amount offered by a reverse mortgage specialist that charged interest of 8.2 per cent. The consumer would incur a total cost on that loan of $418,000.”

Given that math works the same way both here and Down Under, the need for complete amortization statements is obvious — statements that are available to borrowers online and in advance of any loan application or commitment.

This entry was posted on Tuesday, July 31st, 2007 at 1:56 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.