I am currently studying the costs (to lender) of adding certain additional options to the reverse mortgage, including the option of prepayment. Would there be any scenarios of housing price/mortgage rate that would incentivise the borrower to prepay the loan? I already determined the costs of refinancing, so prepaying the loan and immediately reinstating it is already covered. I noticed that for the American reverse mortgage product (HECM) there is no prepayment fee, which could indicate that there aren't really costs for the lender?
I would like to hear your views on this. Is there a scenario in which the borrower has an incentive to prepay the loan early without immediately reinstating it?