Much like a traditional mortgage, a reverse mortgage loan does have fees associated with securing it. The following is a list explaining common fees you may have to pay when getting your reverse mortgage loan.
Origination Fee – The origination fee covers the lenders operating expenses associated with making the reverse mortgage loan. This can include things like overhead, marketing and title searches.
A lender can charge a HECM origination fee up to $6,000 though in many cases the origination fee can be much lower.
Appraisal Fees – Before a reverse mortgage loan can be approved an appraiser will come to your home and inspect it. The appraiser will be looking to determine the worth of your home based mostly on condition, location and the current market situation.
The condition of the home must meet FHA standards and should not be in a state of disrepair.
Mortgage Insurance Premium – The HECM reverse mortgage is insured by the FHA so that in the unlikely event you owe more than the home is worth, the FHA will cover the overage and make the bank whole. There is no recourse on the heirs or the estate. The FHA mortgage insurance on new reverse mortgages is 2% of value of the home (paid at closing), and 0.5% of the balance as an ongoing cost. For example: If your interest rate is 3.25%, the balance will grow as if your annual rate is 3.75% (3.25% + the MI of 0.5%).
Closing Costs – Closing costs that are generally included in a reverse mortgage loan are:
Apply Now to get started with your reverse mortgage loan application.
These materials are not from HUD or FHA and were not approved by HUD or a government agency.