Reverse Mortgage Closing Costs Explained
Transparency is our priority. Here's a clear breakdown of the estimated fees associated with a reverse mortgage so there are no surprises.
These estimates are for educational purposes only and do not constitute a loan offer, commitment, or guarantee. Actual terms, rates, and availability depend on appraisal, credit history, property type, and current market conditions. Total Annual Loan Cost (TALC) disclosures will be provided during the formal application process. Contact us for a personalized quote.
What Does a Reverse Mortgage Cost?
HECM closing costs are similar to a traditional mortgage and fall into three main buckets: the origination fee charged by the lender, the FHA mortgage insurance premium, and third-party services like title, appraisal, and government recording fees. Most of these costs can be financed into the loan so you typically don't pay anything out of pocket.
Origination Fee
Up to $6,000
2% of the first $200K of your home's value plus 1% of the remainder, with a $6,000 cap and a $2,500 floor.
FHA Mortgage Insurance
2% of home value
The upfront MIP protects you and your heirs with the FHA's non-recourse guarantee — you'll never owe more than your home is worth.
Third-Party Costs
$3,406
Estimated title, appraisal, government, and document preparation fees based on California averages.
Third-Party Cost Breakdown
Estimated Total Third-Party Closing Costs
$3,406
These costs are in addition to the origination fee and FHA mortgage insurance premium. Most fees can be financed into the loan.
Good to Know
- •No out-of-pocket costs: Closing costs are typically financed into the loan, so you don't need cash at closing.
- •Non-recourse protection: The FHA insurance means you (or your heirs) will never owe more than the home is worth when the loan is repaid.
- •Ongoing cost: An annual MIP of 0.50% of the loan balance accrues over the life of the loan. There are no monthly mortgage payments required.
- •Fees may vary: Actual costs depend on your location, property type, and market conditions. Use our calculator for a personalized estimate.
These estimates are for educational purposes only and do not constitute a loan offer, commitment, or guarantee. Actual terms, rates, and availability depend on appraisal, credit history, property type, and current market conditions. Total Annual Loan Cost (TALC) disclosures will be provided during the formal application process. Contact us for a personalized quote.