Hello,

I have a question regarding how mortgage taxes are calculated on Reverse mortgages. Are mortgage taxes calculated based on the Principal Limit, Maximum Claim, or 150% of the Maximum Claim (which is the amount that the lender prints on the first page of the mortgage). If you have any experience with this, please let me know how you handled it.

Here's where some of the confusion is happening:

1. The printed amount on the mortgage is 150% of the maximum claim, which from my understanding is a HUD requirement in some states. This means that the county recorder will base taxes off this amount. However, there are ways around this: you can include an affidavit stating what the true advanced amount is at closing.

2. Say that we do only pay mortgage taxes on the principal limit (by including the aforementioned affidavit) in the event that the homeowner's principal limit is exceeded, (due to such things as the client living past the life expectancy that was factored in the mortgage) how is the client supposed to know that they now have to pay the county or state additional mortgage tax?

3. Is it safer to just pay mortgage taxes on the maximum claim amount instead of the principal limit?

We want to avoid overcharging the homeowner, if it can safely be done without posing any future risks to homeowner. Any help is much appreciated

Thank you,

Jonathan