How Much Does a Reverse Mortgage Cost?
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At a glance
- Reverse mortgages, which allow homeowners aged 62 and older to convert home equity into cash while retaining ownership, come with a range of costs that borrowers must carefully...
- Consumer Financial Protection Bureau, reverse mortgage loans are typically more expensive than other home loans due to a combination of upfront and ongoing expenses.
- Upfront costs associated with reverse mortgages include origination fees paid to the lender, which are capped at $6,000 or less for HECM loans, real estate closing costs paid...
Reverse mortgages, which allow homeowners aged 62 and older to convert home equity into cash while retaining ownership, come with a range of costs that borrowers must carefully consider before proceeding.
According to the U.S. Consumer Financial Protection Bureau, reverse mortgage loans are typically more expensive than other home loans due to a combination of upfront and ongoing expenses. Borrowers taking out a Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage insured by the Federal Housing Administration, must complete housing counseling from a HUD-approved agency before receiving the loan, with counseling fees varying based on the agency and the borrower’s income and debt obligations.