The 5 new reverse mortgage rules

You'll pay more fees

New fees are based on the amount of equity a homeowner withdraws.

Borrowers who withdraw more than 60% of their equity in the first year of the loan will pay an upfront mortgage insurance premium equal to 2.5% of the appraised value of their home; the premium is 0.5% for borrowers who withdraw less than 60% of their available equity in the first year. (The previous fees were between 0.01% and 2%).

Borrowers also are required to pay an annual mortgage insurance premium, which remains at 1.25% of the loan balance.

"Even small changes in the fees will have a big impact on borrowers," notes Erin Rearden, a mortgage services program supervisor for Solid Ground, a nonprofit HUD-approved mortgage counseling agency in Seattle. "The drawback of financing these costs is that (borrowers) incur interest on the amount until the loan is paid."

This could leave the homeowner with little or no equity when they sell the home or die.