What are the costs of getting a Reverse Mortgage?

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.

A lender can charge a HECM origination fee up to $2,500 if your home is valued at less than $125,000. If your home is valued at more than $125,000 lenders can charge 2% of the first $200,000 of your home's value plus 1% of the amount over $200,000.

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 $300 and $400.

If the appraiser uncovers a significant problem you will be required to hire a contractor to fix the problem before obtaining your reverse mortgage. That same appraiser will come out again and re-inspect the property.

Mortgage Insurance Premium – The mortgage insurance premium is a fee associated with the HEMC reverse mortgage plan. The initial MIP will be .5 percent or 2.5 percent, depending on your disbursements. Additionally, you will be charged an annual MIP that equals 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 owe 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:

  • Credit Report
  • Document Preparation
  • Flood zone certification
  • Termite inspection
  • Attorney’s fee and title examination
  • Recording fees
  • Escrow/Settlement fee
  • Other fees

 

Apply Now to get started with your reverse application.

Lonestar Mortgage of Texas

20501 Katy Freeway, Suite 100G
Katy, Texas 77450
Phone: 281-492-9158
Fax: 281-946-5108
NMLS: 311730
We lend in the following states: Texas
Broker, NMLS #311730

Figure: 7 TAC §80.200(b) "CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV."