Are the closing costs and fees in a reverse mortgage high?
The fees and closing expenses on a reverse mortgage are higher than on a forward mortgage. But here’s an important thing to understand. The interest-rate on a reverse mortgage is substantially less than the interest rate on a forward mortgage. And this is significant because, on average, 82% of the total cost of any long term mortgage is in the interest rate, not in the closing costs and fees. In evaluating these fees, here’s the key thing to consider – how long do you anticipate staying in your home? If it’s long term and you can spread those fees over a number of years, then the loan makes sense. But alternatively, if you anticipate moving in the short term, getting a reverse mortgage may not be right for you. The reason is because if you can only spread those fees over a couple of years, it makes the reverse mortgage too expensive. It is also worth noting the difference between how closing costs and fees on a reverse mortgage are handled versus how they are handled in forward mortga
