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Understanding Closing Costs
| Below is a list of potential closing costs on a HECM loan. The Fee Range shown will vary depending upon many factors. Please discuss these items with one of our loan officers for a greater understanding. |
Item |
HUD 1 Item |
Explanation |
Fee Range |
Origination Fee |
801 |
The origination fee covers a lender's operating expenses. Additional Info |
2% loan amount. Minimum $2,000 |
Appraisal Fee |
803 |
An appraiser is responsible for assigning a current market value to your home. |
$300-$475 |
| Credit report |
804 |
Verifies any federal tax liens, or other judgments against the borrower |
Under $20 |
Mortgage Insurance Premium (MIP) |
806 |
Fee payable to HUD for HECM loan for government guarantee. More Info | 2% of loan |
Flood Certification fee |
808 |
Determines whether the property is located on a federally designated flood area |
Under $20 |
Hazard Insurance Premium | 903 |
Any unpaid property hazard Insurance premium. |
Varies |
Reserves Deposited With Lender |
750 |
Not typical for Reverse Mortgage. |
|
Escrow, Settlement or Closing fee |
1101 |
Closing services to attorney or title insurance agency |
$400-$700 |
Abstract Fee |
1102 |
To obtain report of all documents of record affecting ownership interest to the property. |
$75-$250 |
Title examination |
1103 |
Fee to attorney or title company reviewing chain of title to issue title insurance |
$150-$400 |
Document preparation fee |
1105 |
Fee charged to prepare the final reverse mortgage documents, including the mortgage note and other recordable items |
$85-$150 |
Attorney’s fees |
1107 |
Preparation and/or legal review of closing documents |
$125-$400 |
Title insurance |
1109 |
A Lender’s Title Insurance Policy is required to protect the Lender against any loss arising from disputes over ownership of property |
Based upon loan amount and rate varies from state to state. |
Recording fee |
1200 |
Fee charged to record the mortgage lien with theCountyRecorder's Office |
$50 to $150. Additional fee will be due in areas where additional doc stamps are required. |
Location Survey |
1301 |
Determines the official boundaries of the property. |
Normally NOT required |
Pest Inspection |
1302 |
Determines whether the home is infested with any wood-destroying organisms |
Normally NOT required. |
Courier fee |
1303 |
Covers the cost of any overnight mailing of documents between the lender and the title company |
$25-$50 |
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