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Costs
COSTS ASSOCIATED WITH H.E.C.M. REVERSE MORTGAGES
Costs that are associated with HECM Reverse Mortgages are similar to a traditional home re-finance, and remain the same from one lender to another. Although there are out of pocket expenses as well as closing costs, a benefit of reverse mortgage costs is that you can finance them as part of your reverse mortgage. Though most upfront costs are regulated, HECM Reverse Mortgage borrowers pay a mortgage insurance premium. Additional costs include an origination fee, appraisal and other closing costs. These other closing costs may include a title search and insurance, surveys and inspections. The limit for a HECM reverse mortgage loan origination fee is 2% of the value of the property up to the first $200,000, and then an additional 1% of the remaining value greater than $200,000. Congruently, there is a minimum origination fee of $2,500 and a ceiling cap of $6,000.

Out of pocket expenses include:

1. Government counseling session (which can be done over the phone or in person) that can cost as much as $125.
2. An FHA Appraisal which can cost anywhere from $450 for a single family home to $850 for a four family home.

The closing costs are typical to a traditional mortgage where the home equity pays the closing fees, and include:

1. A government insurance policy which is 2% of the property’s appraised value.
2. Title insurance
3. State fees which are standard for all mortgages.

Consult with an advisor to learn more about the fees and costs associated with HECM Reverse Mortgages.