Comparing the Tradeoffs

Benefits

Costs

The total cost of getting a reverse mortgage is about the same as getting a traditional mortgage on a new home.

Average costs of moving to a new home vs a reverse mortgage
  FHA Reverse Mortgage Move into a new home
Fees (appraisal, termite inspection, title, etc) 1% 1%
Origination Fees 2% .5%
FHA mortgage insurance 2% 0%
Realtor commission on sale - 6%
Total Cost 5% 7.5%
 
Interest Rate (2008 projected) 4.7% 6.0%

If your home is worth more than $500,000, you may be a better fit for the jumbo programs because the upper borrowing limits are higher.