\n\nWhen reviewing the final closing disclosure for a reverse mortgage, you will see a section dedicated to "Taxes and Other Government Fees." Unlike lender origination fees, which are highly negotiable, these government fees are set in stone by your local and state municipalities.

Depending on where you live, these fees can be a minor annoyance or a massive financial hurdle.

County Recording Fees

When you take out a reverse mortgage, the lender places a lien on your property. This lien must be officially registered into the public record at your county clerk or recorder's office.

The county charges a fee for this administrative service, known as a recording fee. - In most counties, this is a relatively minor flat fee ranging from $50 to $200. - The fee covers the cost of physically or digitally archiving the deed of trust and the mortgage documents.

Because a reverse mortgage actually involves two liens (one for the lender and a second backup lien for HUD), recording fees are sometimes slightly higher than traditional mortgages because there is double the paperwork to file.

State Mortgage Taxes (The Big Expense)

While recording fees are a drop in the bucket, mortgage taxes (also known as mortgage recording taxes, intangible taxes, or documentary stamp taxes) can be brutal.

Certain states view the origination of a new mortgage as a taxable event. The tax is calculated as a percentage of the total loan amount (or in the case of a reverse mortgage, the maximum claim amount).

High-Tax States

If you live in states like New York or Florida, be prepared for sticker shock. - In New York, the mortgage recording tax can easily exceed 1.0% to 1.92% of the loan amount, depending on the county. On a $500,000 home, that can be a tax bill of $5,000 to $9,000. - In Florida, the documentary stamp tax and intangible tax combined total 0.55% of the loan amount, costing thousands of dollars.

Zero-Tax States

Conversely, many states do not charge any mortgage taxes at all. If you live in Texas, California, or Ohio, you will only pay the nominal county recording fees and skip the massive tax bill entirely.

Can These Be Financed?

Yes. Both recording fees and state mortgage taxes can be rolled into the reverse mortgage loan balance. You do not need to write a check to the county or the state out of your own bank account. However, just like all financed closing costs, they will reduce the total amount of equity available to you and will accrue interest over time.

Because these fees are strictly government-mandated, lenders have zero control over them and cannot negotiate them away.\n