One of the nice things about reverse mortgages is that the closing costs can be paid out of your loan proceeds. Reverse mortgage loan is not repaid until the house is sold, refinanced or subject to refinancing. Most often there are no out-of-pocket expenses or any group of fees besides the ones listed below. Here the closing costs associated with reverse mortgages.
Origination Fee Common to the Reverse Mortgage Program
Origination fee simply pays for the lender operating expenses as your designated lender. This covers all of the overhead cost that we accumulate in the process of handling your loan.
FHA Mortgage Insurance Premium are mandatory
HECM loans are required to add the fee known as mortgage insurance (MIP). This is equal to two percent of the home’s appraised value, or the maximum insurance claim amount. This amount is determined on the lesser amount. Mortgage insurance is the governments guarantee that if your provider folds and is no longer in business then you will still have access to your reverse mortgage funds
Reverse Mortgage Appraisal Fees
Typical appraisal fees run anywhere from $500.00 to up over a $1,000 depending on the rural nature of your property. Some companies will cover the upfront fee of the appraisal. An FHA certified appraiser is the only type of appraiser the lender will higher and their job is not only to appraise the value of your home, but to also check for any defects such as leaky roof, termite infestation, etc.. Your home must comply with federal regulations.
Title & Notary Fees
These are third party fees that are charged by the chosen title company. These also may be paid through the closing of your loan. No out of pocket fees are paid.