Breakdown of HECM Costs

Concerned about cost? A Home Equity Conversion Mortgage (HECM) is more affordable than you think…

If you are over the age of 62 and your house is one of your largest assets, the HECM program could be the solution you need to meet your financial goals for a better retirement. By disregarding this asset as part of an overall retirement plan, you could be missing out on an important financial resource that can help improve your cash flow while preserving your savings and investments. While doing your research, you may come across information that suggests a reverse mortgage is an expensive product- however, in many cases, this program is more affordable than you might think. The costs associated with a reverse mortgage generally fall into three categories:

  1. Origination Fee: The origination fee is the fee charged by the reverse mortgage lender.
  2. Mortgage Insurance Cost: Mortgage insurance costs are unique to the FHA insured loan products. HUD guidelines require that all HECM borrowers purchase reverse mortgage insurance, which guarantees that they will never owe more than what the home is worth.
  3. Third Party Closing Costs: Third party closing costs represent a number of services and most are similar to those closing costs of a traditional mortgage. These costs include, home appraisal costs, credit checks, any costs related to title insurance and the FHA-mandated counseling session fee, which ensures that you understand the program and that you are a good fit for the loan.

Many of these upfront fees can be paid from other resources or financed from the proceeds of the reverse mortgage loan itself, and repaid later with interest. In many cases, there are additional lender credits available to reduce these costs. That is why it is important for you to shop around for the best offer. 

Just call 855-523-4326 or email us for an illustration or details on how much money you can save in retirement. With low interest rates, strong home values and our special pricing, now is a particularly important time to take a look at home equity options.