PODCAST · business

Reverse Mortgage cost breakdown

by Prabuddha Sanyal

What a Reverse Mortgage Actually CostsI'm Prabuddha Sanyal, a loan officer with Straightdeal Mortgage. We help seniors explore reverse mortgage options — and one of the first questions I get, almost every time, is some version of this: "Aren't reverse mortgages really expensive? Won't the bank end up owning my house?" Fair questions. And the honest answer is that the costs aren't hidden — they're just spread across four buckets most people have never seen laid out clearly. So today, we're going to open each one. By the end, you'll know exactly what you're paying, what you're paying for, and — this is the part that surprises people — what you're getting in return. Four buckets of costs:BUCKET ONE: CLOSING COSTSThe biggest line item here is the origination fee — what the lender charges to set up the loan. It's federally capped: 2% on the first $200,000 of home value, 1% above that, with a maximum of $6,000. So on a $400,000 home, the most you'd pay is $4,000. Then