Reverse Mortgage Glossary
A servicing fee is a monthly fee charged by the lender to cover ongoing servicing costs such as mailing out monthly statements, verifying occupancy on a periodic basis, and answering customer inquiries and phone calls. If a servicing fee is charged, it usually won’t be more than $25 to $30 and you won’t need to pay it out of pocket. Lenders typically just add it to the loan balance.
Servicing fees are becoming less common in the reverse mortgage industry today, but it still doesn’t hurt to ask your lender if they charge one. If they do, see if they can waive it. If not, it’s probably worth checking with some other lenders to see if you can avoid this added expense.
If you’re working with a lender you like but they insist on charging a servicing fee, ask if they will drop their interest rate a little bit to make up for it. The worst they can say is no, right?