Fees for a Texas Reverse Mortgage

How much will a reverse mortgage cost?

Fees and costs of a reverse mortgage may average a bit higher than those for a conventional loan, but remember, the interest rate is generally lower and there are no up-front or out of pocket expenses. They are regulated and capped by the U.S. Government, which guarantees borrowers that there are no excessive fees. Most borrowers elect to roll all fees and costs into the loan.

These costs break down into 3 categories:

1. Mortgage Insurance Premium - 1/3 of the total cost

Insures that the value of the house is worth at least the amount of the loan at the time. This amount is paid to the FHA.

2. Loan Origination Fee - 1/3 of the total cost

The compensation fee that is paid to the company that helped you obtain the reverse mortgage.

3. Various Title Company Expenses - 1/3 of the total cost
Costs include: Title policy Appraisal Survey (existing survey may be used) Pest Inspection Document Preparation Charges Attorney Fees Compensation to the Title Company

You should consider one thing while evaluating the fees. If you plan to stay in your home, the closing costs will be spread out over a number of years.

The loan is not due and/or payable until the borrower no longer occupies the home as a principal residence.

Rates are adjustable monthly. Fixed rate loans are available.

Interest on your loan, is added monthly. This will appear on your monthly statement. Usually this interest is covered by approximately the first 4% of appreciation that you accrued on your home. Just to note, in 2004, the average house appreciated by 8%.


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