You may qualify for a
Many of the costs to obtain a home purchase or refinance also apply to reverse mortgages. Typical charges are: origination fee, mortgage insurance, appraisal fee, and other standard closing costs. These fees and costs are typically capped and may be financed in as part of the reverse mortgage.
An origination fee covers a lender's operating expenses including office overhead, marketing costs, etc. The entire amount of the origination fee may be financed as part of the mortgage.
Under the HECM (Home Equity Conversion Mortgage) program is equal to the greater of $2,000 or 2 percent of the maximum claim amount set by the FHA loan limit and differs for each county. You can check FHA loan limit for your area. A 2 percent origination fee generally ranges between $3,204 and $5,806 depending on the value of the home.
Home Keeper origination fee's may not exceed 2 percent of the value of the home.
Under the HECM program, borrowers are charged a mortgage insurance premium (MIP) equal to 2 percent of the maximum claim amount, or home value, whichever is less, plus an annual premium thereafter equal to 0.5 percent of the loan balance. The insurance guarantees that government caries out the terms of the loan and also guarantees that you will never owe more than the value of the home when the HECM must be repaid.
A state certified appraiser is responsible for assigning a current market value to your home. Appraisal fees typically range between $300-$400. Federal regulations mandate a home must be structurally sound and in compliance with all home safety codes in order to be eligible for a reverse mortgage. An appraiser must also verify there are no major structural defects such as a foundation, roof, or termite damage.
If any defects are noted. A certified contractor must complete the repairs. Once completed, the same appraiser is paid for a second visit to make sure the repairs have been completed. The cost of the repairs may be financed in the loan and completed after the reverse mortgage is made. Appraisers generally charge $50-$75 dollars for the follow-up visit.
Other closing costs that are commonly charged to a reverse mortgage:
The servicing set-aside is an amount of money deducted from the available loan limit at closing to cover the projected costs of servicing your account. Federal regulations allow the loan servicer (which may or may not be the same company as the originating lender) to charge a monthly fee that ranges between $30-$35. This fee is set aside and only a calculation (not a charge).