HomeEquity Bank is upfront and clear about the costs involved with securing a reverse mortgage.
Let’s run through the costs:
- Closing Fee
- Independent Legal Advice
Appraisal – This is the cost associated with having a qualified appraiser view your home, take photographs and prepare an appraisal report for the bank. Depending on your location, (urban vs rural) the cost can be anywhere from $300 to $450. This valuation report is required to determine the market value of your home for the purpose of calculating the mortgage amount you are eligible for.
There are two options available to you. I can book the appraisal for you through an appraiser in your area that I have chosen from my list of available appraisers. You would be responsible for paying the fee directly to the appraiser prior to or at the time of the visit. Etransfer and credit cards are now widely accepted as a form of payment.
Alternatively, the bank will arrange for an appraiser through First Canadian Title (FCT) and a $350 fee will be deducted from your loan proceeds.
Closing Fee – This cost is set at $1795 and covers the legal costs associated with registering the mortgage on title, title insurance and other fees. If you are using the Income Advantage product
Independent Legal Advice – This is to protect you. The cost can vary depending on the legal firm you choose and can range from $400 to $700. Home Equity Bank wants to ensure that everyone fully understands the process before signing mortgage documents. This meeting will take place in the lawyer’s office where you will also be signing documents. The bank will provide us with a list of lawyers in your area who are familiar with the Home Equity Bank products and you can select one from that list.
The only cost that will need to come out of your pocket or purse before funding is for the Appraisal, if you choose that option. The Closing Fee and ILA are deducted from your mortgage proceeds.
If you choose the appraisal arranged through FCT then there would be no upfront costs for you to budget for.