Reverse Mortgage Fees
In most cases, the following fees are financed into the Reverse Mortgage.
- Origination Fee
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.
- Servicing Fee
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.