What are the costs of getting a Reverse Mortgage?

More information about reverse mortgages:

Much like a traditional mortgage, a reverse mortgage does have fees associated with securing it. The following is a list explaining common fees you may have to pay when getting your reverse mortgage.

Origination Fee – The origination fee covers the lenders operating expenses associated with making the reverse mortgage. This can include things like overhead, marketing and title searches.  Some programs have no origination fee.

With an HEMC reverse mortgage your origination fee is equal to the greater of $2,500 or 2% of the first $200,000.00 of appraised value, 1% of the value over $200,000.00, with a cap of $6,000.00. Origination fee can be bundled into the total mortgage.

Appraisal Fees – Before a reverse mortgage loan can be approved an appraiser will come to your home and inspect it. The appraiser will be looking to determine the worth of your home based mostly on condition, location and the current market situation. The cost of an appraisal is generally between $450.00 and $550.00.

If the appraiser uncovers a significant problem you will be required to hire a contractor to fix the problem before obtaining your reverse mortgage or they can give an estimate to establish a repair set-aside. That same appraiser will come out again and re-inspect the property once the repair is complete.

Mortgage Insurance Premium – The mortgage insurance premium is a fee associated with the HEMC reverse mortgage plan. This fee is equal to 2% of your counties FHA loan limit or the value of your home, whichever is less. Additionally you will pay an annual premium of 1.25% of the loan balance.

The mortgage insurance premium guarantees that you will continue to receive your monthly payments and that you will never have to pay back more that what your home is worth once the loan reaches maturity.

Closing Costs – Closing costs that are generally included in a reverse mortgage are:

 

Apply Now to get started with your reverse application.

John Ruybalid, CSA, NMLS# 201470
502 West Cordova Road, Suite B Sante Fe, New Mexico 87505
Phone: 505-690-1029 | Fax: 505-428-0337