There are three basic categories of reverse mortgage lenders: mortgage banker, home equity lenders and trust deed mortgage lenders. Mortgage banker companies are independent banks that lend against the equity in your home and receive payments from you as the holder of the loan. Most mortgage bankers charge a percentage rate and may require a set of documents before financing is authorized. Home equity lenders are brokers or a type of financial institution that specializes in mortgages. Many home equity lenders have no minimum requirements to apply and many may not even require a credit score.
If you want to find out how much you will be paying for your reverse mortgage each month, there are several sources that can help you. Mortgage calculators are free online; they are based on historical mortgage rates and provide an itemized breakdown of the cost of the loan. You can also get a rough estimate of how much you will borrow through a calculator on your bank’s website. If you need to find out more information on reverse mortgage lenders, you can contact your local bank. They will either be able to tell you how to apply or will be able to provide you with a listing of companies in your area.
Many reverse mortgage lenders require origination and servicing fees to be paid upfront when you take out the loan, but there are some that do not. When comparing reverse mortgage lenders, make sure to compare origination and servicing fees along with other costs. Be sure that you are getting a good deal on the loans and that you are not overpaying for the loan. Find out what the total costs will be upfront and then compare those costs to the amount that you will be able to borrow.