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you would pay a higher UFMIP rate of 2.5% on your reverse mortgage because you would be
borrowing a higher percentage of your home’s value to pay off your current mortgage. But
even then the UFMIP rate is only 42% higher than the rate paid by home buyers using a
standard FHA loan.
As you can see, the numbers get very complicated, so I strongly encourage you to come to our
office in Bellevue (right next to the I‐90 freeway) for an in‐person consultation to understand
how these numbers are calculated. Or call to schedule a telephone consultation appointment.
The bottom line is that it’s true that the closing costs and fees for a reverse mortgage are higher
than the cost of a “conventional” loan, they are not much higher than the cost of a standard
FHA purchase loan and often less expensive. And don’t forget that unlike a conventional loan,
with a reverse mortgage you never have to pay it back!
But what about ominous warnings like this headline?
• Don’t sign your home over to the bank!
Contrary to some stories you may have read about reverse mortgages, you do not sign over
legal title to your property when getting an FHA HECM loan. You remain on title as the legal
owner of the property, just as you would under a standard mortgage.
That bank puts a “lien” on your property, just like a regular mortgage, and that lien gives the
bank the right to sell your home to recover its money in the event that you are not making your
mortgage payments on time.
But remember, with a reverse mortgage you never make a monthly mortgage payment!
Therefore, the bank never has a right to seize your property and sell it as long as you are living
in it as your primary residence (more than 6 months per year) and meeting all of the reverse
mortgage loan obligations, which includes paying your property tax & homeowner’s insurance
bills on time and maintaining the property.
People often misunderstand how the property title system works. You may hear someone say
“the bank owns my house” by which they mean that they have a mortgage on their home and
they are making monthly loan payments to a bank. But if you go down to the local county
Reverse Mortgage Truth Report ©Best Mortgage Inc. (425) 649‐6000 Page 7
