What Does It Cost To Get A Reverse Mortgage

Section 6. What Does It Cost To Get A Reverse Mortgage

A reverse mortgage is a mortgage loan and the process for a reverse mortgage is the same as the process for a normal mortgage loan. There is the application, loan approval, appraisal of your home, and closing.

The cost of obtaining a reverse mortgage loan will vary from area to area and to some extent, lender to lender. But there are two ways to get an idea or estimate of what the costs will be.

First, you can look at the HUD-1 Settlement Statement from when you obtained your most recent first mortgage. Do not use the cost from when you obtained a second mortgage or equity line because second mortgages and equity line mortgages cost less and do not give you a very good estimate of costs. Keep in mind how long ago it was that you obtained your most recent first mortgage because if it was a long time ago, the costs have gone up.

Second, when you apply for a reverse mortgage, the lender is required to give you a "Good Faith Estimate" of what the costs will be. Normally, the "Good Faith Estimate" is close to the actual costs, but the actual costs could be different.

Because a reverse mortgage is a mortgage loan, you can expect the following closing costs or fees:

     - Loan Origination

     - Appraisal

     - Credit Report

     - Flood Certification

     - Mortgage Insurance Premium

     - Abstract of Title Search

     - Title Insurance Binder

     - Title Insurance Policy

     - Attorney or Title Company

     - Mortgage or Deed of Trust Recording Fee

     - Courier or Overnight Delivery Fee

     - Pest Inspection

The above list is a sample list. There may be more or less closing costs or fees.

An important fact to keep in mind is that you have three days after closing to change your mind and cancel the reverse mortgage loan. If you were expecting certain costs, but the actual cost given to you at closing are a great deal higher, then you can cancel the reverse mortgage within three days after closing. As a side note, you do not have to give any reason as to why you canceled. You can simply cancel the transaction.

This ebook is for general information only and may or may not be applicable to your situation. If you have any questions whatsoever, talk with a mortgage broker or lawyer licensed in your state.

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