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of Texas

  Better Business Bureau member Equal Housing Lender
Learn more about reverse mortgage programs.
Learn if you are eligible to receive a reverse mortgage.
Learn the cost involved with a reverse mortgage.
Learn the fact from frequently asked questions.
Learn what is True and what is a Myth.
Learn from examples.
What are customers are saying about our services
Learn more today! Contact us.
Feel financially secure with a reverse mortgage!
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John (J.S.) Mitchell, CPA, President
1-800-617-8994

Offices

Dallas/Ft. Worth - Houston - Austin/San Antonio - El Paso

Spanish Information

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Disponible Ahora!

Our Headquarters

100 Congress # 2000
Austin, TX 78701

Mortgage Broker ID

#50322 - John S . Mitchell, Mortgage Broker

Reverse Mortgage Calculator

Find out how much money you can get from a Reverse Mortgage.
Learn more...

24 Hour "Educator Hotline"

1-800-398-5720
Call our 24 hour hotline and learn the following:

  1. What is a Reverse Mortgage...in plain English
  2. Myths about Reverse Mortgages
  3. How much can you get from a Reverse Mortgage
  4. Advantages (and disadvantages) versus a regular home equity loan
  5. Differences between lenders - How to choose
  6. Who should not do a Reverse Mortgage
  7. Too good to be true?

Contact Us - Receive a Free Reverse Mortgage Packet

Call 1-800-617-8994 or e-mail us. We will impress you with our personal attention and our focus on making your experience with us great. (See "Customer Testimonials")

Fees, Cost & Repayment

The fees and costs of a reverse mortgage typically run $5,000-$8,000. There are no up front costs because all fees and costs are generally added to the loan.

The costs associated with a reverse mortgage break down into 3 categories:

1. Mortgage Insurance Premium - 1/3 of total cost
 

This is paid to FHA. It is insurance which insures that when you die, the value of the house is worth at least the amount of the loan at that time.

2. Loan Origination Fee - 1/3 of total cost
 

This is the compensation paid to the company that helps you obtain the reverse mortgage. On average, the compensation received by a mortgage company on a reverse mortgage is 50% of what the company would receive on a traditional, forward mortgage. Accordingly, the traditional mortgage industry has not spent a lot of money advertising and educating the public about reverse mortgages. That may explain why you haven't heard much about reverse mortgages.

3. Various Title Company Expenses - 1/3 of total cost
 

These costs include the title policy, appraisal, survey, document preparation charges, attorney fees, and compensation to the Title Company.

 

NOTE: All fees on a reverse mortgage are regulated and capped by the U.S. Government. Despite that, they typically run $5,000 - $8,000 and are added to your loan balance. In evaluating these fees, here's the key thing to consider - how long do you anticipate staying in your home? If it's long term and you can spread those fees over a number of years, the cost will likely be $500-$800 a year. Not bad at all. But alternatively if you anticipate moving in the short term, getting a reverse mortgage may not be right for you. The reason is because if you can only spread those fees over a couple of years, it makes the reverse mortgage too expensive.

Loan Repayment

The loan is not due and payable until the borrower no longer occupies the home as a principal residence. ( i.e., the last surviving borrower sells, moves out permanently, or passes away. )

Interest Rates

The rate on your reverse mortgage is typically 5%-6% and is adjustable monthly or annually. The most common reverse mortgage is the monthly adjustment reverse mortgage. The interest rate on this loan is 1.5% above the 1-year T-bill rate, which changes every Tuesday. Please note that the 1-year T-bill rate is equivalent to the CD rate and has not been over 6% in excess of 15 years. The last time it was over 6% was 1990.

Regarding the interest that is added to your loan, it is added monthly and you receive a monthly statement. Please take comfort in knowing that approximately the first 4% of appreciation that occurs on your house each year usually covers the interest being added to your reverse mortgage loan balance on the average term loan.. As a point of reference, in 2004, the average house in the U.S. went up 8%.

 
   
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