Fees & Costs

All costs associated with obtaining a Reverse Mortgage can be "financed" into the loan. This means they can be paid from the proceeds of your Reverse Mortgage transaction.

These costs include:

• Origination Fee
• Third Party Fee’s
• Mortgage Insurance Premium (MIP)
• Servicing Fee
• Interest Rates

Origination fee pays your lender for preparing the paperwork and processing your loan. On the government products this fee is limited at 2% of your home value or FHA lending limit, whichever is less.

Third Party Fees: Completing your Reverse Mortgage requires a variety of services preformed by other people than the lender. These people are called “Third Parties”. Their services include an appraisal, title search, inspections, recording fees, credit checks; among others. Third party closing costs on a Reverse Mortgage vary with the value of the home and from one state or county to another.

Mortgage Insurance Premium or MIP is a closing cost under the HECM program. This insurance guarantees that you will receive your payments promised by your lender and that you do not have to repay the loan for as long as you live there; no matter how long you live there, what happens to your value and/or what happens to your lender. This insurance is paid in two parts. 2% of your home value or FHA lending limit, whichever is less is financed into your closing costs. .5% is also added to the interest rate charged on the outstanding loan balance.

Servicing Fees: Servicing happens after your loan has closed and funded. This includes sending you your payments, making or changing loan advances at your request and sending out account statements regularly. The servicing fee is not considered a closing cost and is usually $30 per month if you choose the HECM annual program and $30 a month if you choose either of the HECM monthly programs. For the proprietary products this fee differs.

Interest Rates: Currently most lenders offer adjustable interest rates on all Reverse Mortgage Products available to you. This means that the rate can change and go up or down. We don’t have control over what the rate will be over the life of the loan because it’s tied to the current One Year US Treasury for the HECM programs, the One Month CD for the Homekeeper and the LIBOR for the proprietary products. For more information please contact a Reverse Mortgage Advisor.