What Are the Closing Costs on a Reverse Mortgage?
What are Reverse Mortgage Closing Costs?
The closing costs for a reverse mortgage are dependent on the type of reverse mortgage loan chosen, the lender chosen and the money taken out upfront. Below find a list and brief explanation of typical fees at closing:
- Loan origination fee covers the processing of the new application and compensates for completing the sale. The fee usually is a percentage charge of the loan amount, typically 0.5% to 1.0%. If your loan is for $200,000, you’d pay $1,000 or $2,000.
- Lender fee compensates the lender for administering the loan and overseeing the taxes and insurance.
- Title insurance covers the buyer and the lender from possible ownership disputes,
- Recording fee covers the mortgage lien recorded with the county clerk.
- Credit Report fee covers the fees for checking for any liens or judgements.
- Flood Certification fee covers charges for confirming if property is in a flood zone.
- Preparation Fee for Documents covers fees for the preparation of closing documents.
- Escrow and closing fee covers for closing services.