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Reverse mortgage lenders slash fees to entice consumers 2010-04-20 Lenders are lowering closing costs to make reverse mortgage loans more attractive to prospective borrowers, the Wall Street Journal reported over the weekend. According to the newspaper, a number of reverse mortgage lenders have done away with closing costs - a move that can save borrowers as much as $10,000. A consultant to one of the biggest lenders said, anecdotally, that wealthier people interested in tapping their home equity are looking more closely at reverse mortgages now that their costs are lower. Lenders are combating reduced interest in reverse mortgages, the Journal notes: Home-equity conversion mortgage volume in the past several months is 22 percent its year-ago level. And it may be a borrowers' market. But, the paper cautions, would-be reverse mortgage borrowers shouldn't compare lenders solely on the basis of their closing costs. It can also be worthwhile to consider what kind of loan - fixed- or adjustable-rate - is the best option. The former are good for those who want a lump-sum payment, but the latter may be superior for a credit line that will be drawn on over time. Either way, now may be an excellent time to borrow.  |
