What Does Total Annual Loan Cost Mean?
Total annual loan cost is the total cost of a reverse mortgage that a person must pay. A reverse mortgage is a way for people who have built up equity in their home to use that equity to get a loan. In the context of insurance, mortgage insurance premiums are used in the calculations that are made to get the total annual loan cost.
Insuranceopedia Explains Total Annual Loan Cost
There are a number of other factors that go into the calculation of the total annual loan cost. Among these factors are interest, principal, servicing costs, and closing costs. All of these factors added up together is what generates the total annual loan cost. People can use the figure for the total annual loan cost to decide if getting a reverse mortgage is in their best interest. If the number is low enough, then it could be a wise decision of those in need.