REVERSE MORTGAGE COST GUIDE
Reverse Mortgage Costs & Fees
Understanding the True Cost of a Reverse Mortgage
One of the most common questions homeowners ask is:
“How much does a reverse mortgage cost?”
It’s an important question—and one that deserves a clear, straightforward answer.
Like any mortgage, a reverse mortgage has costs associated with obtaining the loan. These may include lender fees, third-party closing costs, appraisal fees, title charges, mortgage insurance for FHA-insured loans, and interest.
The exact amount depends on factors such as your home’s value, the loan program you choose, and your individual circumstances.
In many cases, eligible reverse mortgage costs can be financed into the loan rather than paid entirely out of pocket at closing. Financing those costs preserves cash at closing but increases the loan balance.
Clear Costs. No Surprises.
At Platinum Lending Solutions, we believe you should fully understand every cost before making a decision.
Typical Cost Categories
• Origination fees
• FHA mortgage insurance for HECM loans
• Third-party closing costs
• Interest charges
• Servicing fees, if applicable
• Ongoing homeowner expenses
What Costs Are Associated With a Reverse Mortgage?
Reverse mortgage expenses generally fall into several categories.
Understanding how each expense works can help you compare loan options and better understand both the upfront and long-term cost of borrowing.
The Main Cost Categories Include:
• Origination fees
• FHA mortgage insurance premiums for HECM loans
• Third-party closing costs
• Interest charges
• Servicing fees, if applicable
• Ongoing homeowner responsibilities
Reverse Mortgage Cost Breakdown
Here’s a closer look at each major cost.
1
Origination Fees
The origination fee compensates the lender for processing, underwriting, and funding your reverse mortgage.
For FHA-insured Home Equity Conversion Mortgages (HECMs), the maximum origination fee is established by federal guidelines. The actual fee depends on the home’s value and applicable FHA rules.
Origination fees may often be financed into the loan rather than paid out of pocket, although this will increase the total loan balance over time.
When comparing lenders, it’s important to look beyond just the origination fee. Interest rates, available loan proceeds, service, and overall loan structure can all affect the value of a reverse mortgage.
2
FHA Mortgage Insurance Premium
If you choose a federally insured HECM reverse mortgage, you’ll pay mortgage insurance premiums.
For HECM loans, FHA mortgage insurance supports important program protections.
HECM Mortgage Insurance Supports
• Federal insurance backing
• Non-recourse protection
• Protection of available HECM loan proceeds if the lender is unable to make required payments, subject to program rules
• Consumer safeguards established by FHA
Mortgage insurance typically includes an upfront mortgage insurance premium and an annual premium that accrues over time as part of the loan balance.
If you’re considering a proprietary or jumbo reverse mortgage, mortgage insurance may not apply, depending on the program.
3
Third-Party Closing Costs
Like a traditional mortgage, reverse mortgages involve third-party services required to complete the transaction.
• Home appraisal
• Title insurance
• Escrow or settlement services
• Recording fees
• Credit report
• Flood certification
• Document preparation
• Government recording charges
These costs vary based on the property’s location, value, and the service providers involved.
Homeowners in Oregon and Washington may notice slight differences in closing costs because recording fees, title charges, and local government fees vary by county and state.
4
Interest Rates
Reverse mortgages accrue interest over time because borrowers are not making required monthly principal and interest payments.
Interest rates depend on current market conditions, the loan program selected, fixed or adjustable-rate options, and borrower qualifications.
Interest is added to the loan balance over time rather than paid each month.
We’ll help you compare available interest-rate options and explain how they may affect your long-term loan balance.
5
Servicing Fees
Some reverse mortgage programs include servicing fees for administering the loan throughout its life.
Many modern reverse mortgage programs no longer charge separate monthly servicing fees, but program availability varies.
We’ll review any applicable servicing costs before you move forward so you understand exactly how your loan works.
6
Ongoing Homeowner Responsibilities
One of the biggest misconceptions about reverse mortgages is that homeowners no longer have financial responsibilities after closing.
While there are generally no required monthly principal and interest payments, homeowners must continue meeting important property-related obligations.
You Must Continue To:
• Pay property taxes
• Maintain homeowners insurance
• Keep the property in good repair
• Pay homeowners association dues, if applicable
• Continue using the property as your primary residence
Failing to meet these obligations could place the loan in default, making it important to budget for these ongoing expenses.
Can Reverse Mortgage Costs Be Financed?
In many cases, yes.
One advantage of a reverse mortgage is that many eligible closing costs can be rolled into the loan balance instead of being paid out of pocket at closing.
This can help preserve retirement savings and reduce the amount of cash needed to complete the transaction.
However, financing costs into the loan also increases the overall loan balance, so it’s important to understand the long-term impact.
During your consultation, we’ll explain exactly how your costs are structured and review all available options.
Are Reverse Mortgages More Expensive Than Traditional Mortgages?
The answer depends on your financial goals.
HECM reverse mortgages can have higher upfront costs than some traditional refinance loans because of FHA mortgage insurance and other program-specific expenses.
Rather than focusing only on upfront costs, it’s important to evaluate both the cost of the loan and how its structure fits your financial goals.
Features to Consider Alongside Cost
• No required monthly principal and interest payments
• Flexible payment options
• Access to home equity during retirement
• HECM non-recourse protection
• FHA-insured program safeguards for HECM loans
Reverse Mortgage Costs in Oregon & Washington
Homeowners throughout Oregon and Washington often ask whether reverse mortgage costs differ based on location.
While the basic loan structure is consistent nationwide, certain expenses may vary depending on where your property is located.
• County recording fees may differ.
• Title and escrow charges can vary by region.
• Property values influence available loan proceeds.
• Higher-value homes may qualify for proprietary or jumbo reverse mortgage options.
Whether your home is in Oregon or Washington, we’ll prepare a personalized cost estimate based on your specific property, available program, and financial goals.
Why Comparing Costs Matters
Not every reverse mortgage is structured the same way.
As an independent mortgage broker, Platinum Lending Solutions works with multiple reverse mortgage lenders rather than offering only one product.
That allows us to compare the overall structure of available programs—not just a single fee.
Our goal isn’t simply to find the lowest fee. It’s to help you find the loan that supports your retirement objectives.
We Can Help You Compare
Available Loan Programs
Compare available HECM and proprietary reverse mortgage options.
Interest-Rate Options
Understand available fixed and adjustable-rate structures.
Estimated Loan Proceeds
See how much home equity may potentially be available based on the applicable program.
Closing Costs
Review estimated lender and third-party expenses before making a decision.
Proprietary vs. FHA-Insured Loans
Compare different reverse mortgage program structures and available features.
Overall Long-Term Value
Consider the entire loan structure rather than focusing on only one fee.
Frequently Asked Questions
Do I have to pay closing costs out of pocket?
Often, no. Many eligible reverse mortgage costs can be financed into the loan, reducing your upfront cash requirements.
Will I have a monthly mortgage payment?
No required monthly principal and interest payments are generally due as long as you continue meeting the loan obligations.
Are reverse mortgage interest rates fixed or adjustable?
Both options may be available depending on the loan program and how you choose to receive your funds.
Are proprietary reverse mortgages less expensive?
Not necessarily. Some proprietary loans eliminate FHA mortgage insurance but may have different interest rates, loan limits, or fees. We’ll help you compare the available options.
Will I receive a breakdown of every fee?
Yes. Before closing, you’ll receive detailed disclosures outlining the estimated costs, loan terms, and important information so you can make an informed decision.
Explore My Reverse Mortgage Options
Every reverse mortgage is unique. A personalized analysis can show how estimated costs, available proceeds, and repayment structure may apply to your situation.
At Platinum Lending Solutions, we’ll review your home’s value, equity, loan goals, and available programs and explain the estimated costs and available proceeds clearly. There is no pressure or obligation to proceed.
If you’re considering a reverse mortgage in Oregon or Washington, request a personalized reverse mortgage consultation. We’ll help you understand the numbers and determine whether the available options fit your goals.
