Typically, there are three categories of reverse mortgage closing costs:
- FHA Insurance (also called the Mortgage Insurance Premium, or MIP),
- Origination fees, and
- Other closing costs, including title insurance, escrow fees, appraisal, notary fees.
These costs are typically funded by the loan and are not “out of pocket” expenses. A good advisor will explain all the reverse mortgage costs and can provide a good-faith estimate for you to review with your family. There is no ongoing cost of a reverse mortgage in the form of monthly payments by you; however, you are required to continue to pay property taxes, provide property insurance, and maintain your home.
See related FAQ: What kind of reverse mortgage rates and fees can I expect?