By Phil Ganz
Edited by Ryan Skerritt
Reverse mortgages, specifically Home Equity Conversion Mortgages (HECMs), allow Florida homeowners aged 62 and older to unlock up to 80% of their home equity—often within weeks—while deferring repayment.
With home equity accounting for over $11 trillion of wealth nationwide, reverse mortgages are a powerful financial tool for seniors.
Verify Your Reverse Mortgage Eligibility
However, understanding the associated closing costs and fees is crucial for making an informed decision.
This guide breaks down the various costs you may encounter when securing a reverse mortgage in Florida.
How Reverse Mortgages Work in Florida
A reverse mortgage allows homeowners aged 62 or older to convert a portion of their home equity into cash without requiring monthly mortgage payments.
Instead of making payments to the lender, the lender pays the homeowner in a lump sum, monthly payments, or through a line of credit.
With a reverse mortgage, you can typically access 40% to 80% of your home’s value, depending on factors like your age, home value, and current interest rates.
For example, a homeowner with a $300,000 property might access $120,000 to $240,000, while someone with a $600,000 home could access $240,000 to $480,000.
The FHA sets a maximum lending limit of $1,149,825 as of 2025.
To access these benefits, it's important to understand that reverse mortgages come with various fees and closing costs.
However, most closing costs are not paid upfront but are instead added to the loan balance.
The only cost typically paid out of pocket is the counseling fee
Verify Your Reverse Mortgage Eligibility
Origination Fee
The origination fee compensates the lender for processing your reverse mortgage. In Florida, the fee is capped at $6,000 by FHA guidelines and is calculated as:
- 2% of the first $200,000 of your home’s value
- 1% of any value above $200,000
For example, on a $300,000 home, the origination fee would be $5,000.
Initial Mortgage Insurance Premium (MIP)
This upfront fee ensures the loan is FHA-insured, protecting both borrowers and lenders.
- Cost: 2% of the home’s appraised value or the HECM lending limit ($1,149,825), whichever is lower.
- Example: For a $400,000 home, the MIP would be $8,000.
Appraisal Fee
An appraisal determines your home’s market value and eligibility for a reverse mortgage.
- Cost Range: $400–$600
- Factors Affecting Cost: Property size, location, and type (e.g., rural or urban).
Counseling Fee
HUD-approved counseling is mandatory to ensure you understand the terms of the loan.
- Cost Range: $125–$200
Third-Party Fees
These fees cover services provided by external parties, such as title companies and government offices.
- Title Insurance: Protects against title-related issues. Cost: $1,000–$2,500
- Flood Certification: Determines if your home is in a FEMA flood zone. Cost: $15
- Credit Report: Provides a comprehensive credit history. Cost: $60–$106
- Recording Fee: Covers the cost of recording the mortgage documents with the county. Cost: $200–$500
- Notary Fee: Covers notarizing loan documents. Cost: $50–$150
Florida-Specific Fees
Reverse mortgages in Florida may incur unique state-related charges:
- Documentary Stamp Tax: Calculated at $0.35 per $100 of the loan amount.
- Intangible Tax: Calculated at $0.002 per $1 of the loan amount.
For example, on a $300,000 loan, the total Florida-specific fees would be $1,050 for the stamp tax and $600 for the intangible tax, totaling $1,650.
Verify Your Reverse Mortgage Eligibility
Total Closing Cost Range
The total cost of a reverse mortgage in Florida typically ranges from $9,000 to $35,000. This includes fees for origination, mortgage insurance, appraisals, and other third-party services.
Here’s a breakdown of the estimated total costs for a reverse mortgage in Florida:
| Fee Type | Cost Range |
|---|---|
| Origination Fee | $2,500–$6,000 |
| Initial MIP | $4,000–$22,996 |
| Appraisal Fee | $400–$600 |
| Counseling Fee | $125–$200 |
| Title Insurance | $1,000–$2,500 |
| Flood Certification | $15 |
| Credit Report | $60–$106 |
| Recording Fee | $200–$500 |
| Notary Fee | $50–$150 |
| Florida-Specific Fees | $1,650–$2,500 |
Verify Your Reverse Mortgage Eligibility
Is a Reverse Mortgage Right for You?
A reverse mortgage can help you turn your home equity into cash, giving you financial freedom without monthly mortgage payments.
While the total costs can range from $9,000 to $35,000, understanding these fees can help you decide if this option fits your needs.
If you’re considering a reverse mortgage, it’s important to compare lenders, understand the fees, and know how much money you can get.
With careful planning, you can use your home’s value to improve your financial security in retirement.
With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.
About Author - Phil Ganz
Phil Ganz has over 20+ years of experience in the residential financing space. With over a billion dollars of funded loans, Phil helps homebuyers configure the perfect mortgage plan. Whether it's your first home, a complex multiple-property purchase, or anything in between, Phil has the experience to help you achieve your goals.
About Editor - Ryan Skerritt
Ryan Skerritt has over 10+ years of experience in the residential financing space. With over two hundred and fifty million of funded loan volume, Ryan has the skill set to help any homebuyer configure the perfect mortgage plan.
