Reverse Mortgage Cost Revealed

Today we are going to compare a reverse mortgage to a no closing cost refinance to see how expensive a reverse mortgage really is. There are no smoke and mirrors just facts so you can decide if a reverse mortgage is too expensive.

First Lets Look at a Regular Traditional Loan!!!

Lets say we want to take out $100,000 to pay some bills and have supplemental income.

Lets have 5% be our example of your interest rate

Lets say you have no closing cost!!! What a deal!!!

Finally lets be safe and put this loan on a 30 year fixed!!!

Ok Lets See What We Got!!!

Monthly Payment: $ 536

Yearly Payments: $6,441.86

Total Payments: $193,255.78

Now Lets Look at the Reverse Mortgage
Benefit Amount: $100,000

Interest Rate: 5%

The Dreaded Cost:
FHA Insurance: $2,000
Origination Fee: $2,500
Other Cost: $2,000
Service Fee: $ 5,000
Total Cost: $11,500
Total Loan Amount: $111,500
Wow that’s expensive!!!????

Or is it???

So now we know we are paying an extra $11,500 but what does it cost us.

Remember our monthly payment on the 30 year fixed is $536 so what is the payment on a reverse?

Answer $598

A difference of: $62.56 a month

Do you still think reverse mortgages are too expensive?

Ask yourself is a product that now gives you a choice every month if you want to make a payment or not worth an extra $62.56 sense a month. Think about what that extra $62.56 buys you!!!

A. Peace of mind of never facing foreclose if you miss payments!
B. And if you decide never to make a payment it is saving you $193, 255.76!

So What do You Think?

Most people who inquire have a preset mindset that the reverse mortgage is a very expensive option, when in reality the difference is usually less than $100 a month. Before you decide if a reverse mortgage is too expensive for you think about what you want as a benefit and let that be your decision maker. Is it to get rid of a mortgage payment, pay down debt, supplement your income, have some savings for a change. Solving these problems truly change your life!!! Ask yourself is that worth $62.56 a month???