In most cases, the following fees are financed into the Reverse Mortgage.
Your lender or broker will charge a loan origination fee ranging between $2,500 and $6,000 depending on the home's property value.
Mortgage Insurance Premium (MIP)
Mortgage insurance protects both the borrower and the lender from isk. At closing, you'll pay an up-front mortgage insurance premium equal to either 0.5 percent or 2.5 percent of the lesser of the property value or $636,150 depending on how much you borrow in the first year. After that, you'll pay an annual MIP of 1.25 percent.
Third Party Charges
These fees cover services involved in processing your loan, such as title insurance, a credit report, the appraisal cost and others.
Currently, most lenders don’t arge a servicing fee; however, if your lender charges a servicing fee, it covers the cost of sending account statements and distributing payments.
Interest accrues on the portion of the reverse mortgage you have used and is added to the total loan balance.
These materials are not from HUD or FHA and were not approved by HUD or any government agency.
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1. At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other assets; 2. Charges will be assessed with the loan, which may include an origination fee, closing costs, mortgage insurance premiums and servicing fees that will be added to the loan balance; 3. As with any home-secured loan, the borrower must meet their loan obligations: keeping current with property-related taxes, insurance, maintenance and any homeowners association fees; failure to pay these amounts may cause the loan to come due, may subject the property to a tax lien or other encumbrances, or may result in the loss of the home; 4. The loan balance grows over time, and interest is charged on the outstanding balance. The interest on the loan is not deductible from the income tax return until the borrower makes partial or full repayment.