A reverse mortgage, once considered an expensive way for seniors to get cash for equity in their homes, may be cheaper thanks to cuts in closing costs by mortgage lenders.
With a reverse mortgage, homeowners 62 and older can use home equity to get cash from a lender in the form of a line of credit, monthly payments or a lump sum based on the home’s value while still living in the home.
Previously, fees for a reverse mortgage may have come out to about 5% of the value of a home, according to The Wall Street Journal but reverse mortgage seekers may now be able to save $10,000 or more on costs.
Reverse mortgage lender MetLife (Stock Quote: MET), for example, has cut out its initial reverse mortgage fee as well as monthly service charges, the Journal says.
If you’re considering a reverse mortgage, check out MainStreet’s extensive coverage, including reverse mortgage basics, what you need to know about reverse mortgage counseling and a detailed list of the paperwork involved.