• Question
  • service fees on reverse mortgage

    Asked on 12/2/2007

    Upon satisfying (paying off a reverse mortgage) is refund do the borrower for the unused portion of the service fee that was set aside at time of closing?

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  • Categories: Reverse Mortgages, Right for You?, Costs

Answers

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  • NewRetirement User

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  • Good question! The short answer is that while the money is in the service fee set aside account it is not considered borrowed money and therefore does not accrue interest, is not paid back and is not refunded. If it was refunded you would then owe it. The money becomes borrowed when it is taken out to pay the monthly service fee. It is the same concept as an unused line of credit. When you pay it off the line of credit just disappears.

  • Login to rate this answer:   Answered on 12/3/2007
  • NewRetirement User

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  • The service fee set aside is funds set aside from your proceeds in which to pay your monthly service fee with.

    Money left unused in your monthly service fee set aside is unused equity in your home :) So, if you were to pay your loan off, the money that was left in your service fee set aside, would be equity left in your home.

    I hope that clarifies it. It is indeed a confusing question.

    I am a Reverse Mortgage Specialist employed by Financial Freedom. Should you have further questions, I would be happy to answer them for you.

    tfield @ financialfreedom.com
    877-632-7890

    Tam :)

  • Login to rate this answer:   Answered on 3/6/2008
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.