In addition to the primary fees, there are several smaller reverse mortgage costs that borrowers are expected to pay. These costs include a credit report fee, pest inspection, and flood certification fee. If a borrower is required to make important home repairs, a repair administration fee of up to 1.5% of the repair bid will also be applied. It is a common misconception that reverse mortgage loan advances are taxable. But this isnt the fact as these loan advances are not considered as income earned by the borrower. 15. Once the home is sold any leftover funds go to the lender. Once the loan has been repaid any and all leftover funds go back to the borrower or to their heirs. <a href=http://productsindevelopment.com>reverse mortgage</a> Misconception #2: "If We take out a reverse mortgage I most certainly will have zero estate left." Yet again, this is not the fact. Seniors taking out a reverse mortgage can live in your home as long as they want, and also gained earnings from the reverse mortgage. With each advance out of the reverse mortgage, the homeowner's collateral in the home minimizes. There will come a time when the level of equity is extremely minimal, but, the reverse mortgage influences just the relationship from the mortgage to the actual valuation on the home. It won't influence anything more which the house owner has access to, that is in addition part of the house. The beneficiaries on the real estate can dispose of the property any method they opt for, however they are obligated to pay the reverse home mortgage. As previously stated, adjustable reverse mortgage interest rates are based on a specific financial index. However, this is not the only factor that determines rates. Lenders also add a margin to this index. For example, if a loan is said to be an HECM LIBOR 300, it is a federally-insured loan based on the LIBOR index with a 3% margin. If the index is 1.25%, the borrower would be given a 4.25% interest rate. The margin is the markup necessary to ensure that the lender's operating costs are covered. Margins are fairly consistent amongst lenders and do not leave much room for negotiation. While this is unusual, borrowers' credit score and assets have no bearing on the reverse mortgage rates they qualify for. While some reverse mortgage blog owners have been focusing on negative predictions, 2012 will bring several positive changes. HUD has extended the maximum claim limits through 2012 and increased funding for reverse mortgage counseling. Seniors who own homes valued at $625,500 will still be able to take full advantage of their equity in 2012.