Reverse Mortgage Glossary
Lenders will often give you a lender credit to help offset all or part of your closing costs, which can include origination fees, 3rd party costs, and IMIP. This reduces (or maybe even eliminates) the net costs that are rolled into the new reverse mortgage. This reduces your starting loan balance and may give you access to more loan proceeds.
How much of a lender credit you may get depends on your starting loan amount, the proportion of the value of your home that you’re borrowing, and the current interest rate environment.
Generally speaking, if you’re starting off with a larger loan balance, it is much easier for lenders to offer substantial lender credits. If your starting loan balance is minimal, it may be impossible to get the lender to credit any costs at all.
Regardless of the situation, the most important thing is that you ask about it. See if the lender is willing to cover some or all of your costs. The worst they can say is no, right?