Question

Reverse Mortgage Origination Fees deducted from loan proceeds

Forum|Forum|4 years ago
March 22, 2022
1 reply
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Hi, I'm trying to understand why Reverse Mortgage Origination Fees are not considered deductible when they are deducted from the loan before receiving the money but they are deductible when paid in cash up front. Isn't it the same thing; you no longer have access to the money?

M

MAK70

No, since you retain title to the home it does not qualify as a mortgage, A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. With a reverse mortgage, you retain title to your home. Generally, any interest (including original issue discount) accrued on a reverse mortgage is considered interest on home equity debt and isn’t deductible.