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I'm not a mortgage lender, but I do work in banking and have a general knowledge of mortgages.
I have to say, Holey Moley!!! $13,000 in closing costs?? You have got to be kidding me. That is usury! Around here closing costs are $995 to $1300. Are you sure you didn't put an extra zero on there?
How many years do you currently have left on your mortgage? What would the payment difference be if you refinanced for the same term that you have left now?

As far as reverse mortgages go, they can be great if you aren't concerned with leaving your house to your heirs. You are basically selling your house back to the bank. They pay you and build their equity in your house--up to a predetermined point. They used to be bad news, but are now a pretty good deal--if they are right for your circumstances. You have to go through counseling before you can get a reverse mortgage. Here is a link that talks about reverse mortgages.
http://www.aarp.org/money/revmort/

Edited to add the HUD link.
http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm
 

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Oh you're welcome. Reverse mortgages aren't for everyone. And do have their drawbacks--for example if you have to go in a nursing home for an extended period, you might be in jeopardy of losing your house. They are great for people on fixed incomes and in good health, that need money for improvements or such. There is no monthly payment. As opposed to say a home equity loan.

But I have to say that those closing costs would really put me off. There is all kinds of legal work to do on a mortgage--title search, mortgage release (on the old mortgage), mortgage filing, flood search, mortgage preparation, document preparation, and so on. But geeze, that is 10 times what it costs around here. I think I would shop around for another mortgage company. Banks are hungry for people with good credit right now.
 

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I was just watching HGTV. They said that closing costs average 3% of your loan amount. So unless you have a helluva mortgage, you need to look for another lender.
 
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