How Much Does a Reverse Mortgage Cost?

If you have heard of reverse mortgages, you probably would be wondering what they cost. Are there too many upfront costs? And how do they compare with traditional mortgages?

These are all valid concerns, but there is really no need to worry too much about any large out-of-pocket expenses. The interest rates and origination costs associated with reverse mortgages are usually higher than traditional “forward” mortgages. However, most closing costs and fees can be rolled into the loan, meaning you don’t have to shell out any significant out-of-pocket money upfront.

Cost of Mandatory Counseling

Completing the mandatory counseling is usually the first cost homeowners incur. The cost will depend on the agency providing the service, with many charging around $125 and $250 per session, and some offering free counseling.

Counseling is a crucial step in taking out a reverse mortgage. The counselor will determine your ability to pay using factors such as your debt obligations, income, and more. Usually, the counseling fees are explained to you before the actual counseling so that you can decide whether you can afford it.

The Breakdown of Fees and Charges

According to the US Department of Housing and Urban Development (HUD), the fees and charges for HECM include:

Your credit score, the lender you choose, and interest rates can all affect the overall cost of a reverse mortgage. You can choose to pay these fees in cash or from the loan proceeds.

Choosing to pay from the reverse mortgage loan means you don’t have to bring any money to the closing. Instead, the fees are deducted from the total amount you qualify for before paying you whatever is left.

Ongoing Costs for a Reverse Mortgage

Home equity conversion mortgages (HECMs), which are the most common types of reverse mortgages, come with ongoing costs that are added to the balance of your loan at the end of every month for the life of the loan.

Borrowing only as much as you need is a great way to reduce ongoing costs because the higher your loan amount and the longer it stays, the more charges you will get in terms of ongoing costs.

The following make up the ongoing costs for a reverse mortgage:


Take the first step

towards the retirement you want

Find out how much you can receive with a reverse mortgage by completing the form below.

  • By submitting this request for information, I hereby provide my signature, expressly consenting to receive information by email or phone, via automated dialling systems, texting, and/or prerecorded messages, from or on behalf of Giraffe and Its fulfillment partners and may agree to receive other offers on the telephone number I provided above, including my wireless number, even if I am on a State or Federal Do-Not-Call list. I understand consent Is not a condition of purchase and that I may revoke my consent at any time. I can revoke consent by calling Giraffe customer service at 1-866-723-6466 or contacting my loan officer.