What are the typical costs involved in obtaining a Reverse Mortgage?
You can expect to pay some of the same fees as you do with a regular, or forward mortgage, including: • Title or escrow fees • An appraisal fee • A document preparation fee. In addition, almost all lenders charge an origination fee, which can vary by lender and by the type of reverse mortgage product. FHA’s Home Equity Conversion Mortgage (HECM) also requires a mortgage insurance premium. Depending on the reverse mortgage product, there may also be a monthly servicing fee, which can range from $30 to $35 per month. In most cases, the fees involved in obtaining a reverse mortgage can be “financed,” that is, they can be paid from the proceeds of the loan. The appraisal fee is typically the only expense the borrower is required to pay “out of pocket.” It is important to shop around and compare costs. Reverse mortgage lenders should provide you with a total amount loan cost or TALC rate, which is the projected annual average cost of a reverse mortgage, including all itemized costs. As more
