These are the upfront fees that you will need to pay:
Origination fee paid to the lender. This is government regulated. The exact formula is 2% of the first $200,000 in property value and 1% of the amount above $200,000.
Appraisal, title, inspection and other third party fees.
Up front mortgage insurance premium (MIP) that must be paid to the FHA; in most cases this is 0.5% of the property value. This premium pays for the protections that the FHA gives to borrowers.
Over the life of the reverse mortgage, borrowers must also continue to pay a 1.25% annual MIP on the loan balance. Generally, the costs of a reverse mortgage are financed into the loan so that the borrower does not have to pay out of pocket.
This gives us an upfront cost which depends on the size of loan and is financed, meaning it is added to the loan balance.
The counseling and appraisal fees must be paid up front. Some counselors offer a discount for paying up front, but the choice is yours.
These cost are calculated and disclosed in Closing Statement before you make the decision to pursue reverse mortgage.