Reverse Mortgage Process
Below is the process for starting and learning about how Reverse Mortgages work. See how a Reverse Mortgage is started by following the below procedures.
1. Reverse Mortgage Awareness
Homeowner learns about reverse mortgages from a news article, advertisement, word-of mouth, etc.
2. Reverse Mortgage Action
Homeowner seeks additional information and documentation by contacting a Reverse Mortgage Specialist. You can do this by contacting www.thereversemortgagehotline.com. A homeowner can also seek additional information through HUD, Fannie Mae, AARP, or the National Counsel of Aging.
3. Reverse Mortgage Counseling
Homeowner seeks counseling from a local HUD-approved counseling agency, or a national counseling agency, such as The Reverse Hotline. Counseling is required for all reverse mortgages and may be conducted face-to-face or by telephone.
4. Reverse Mortgage Application
Homeowner fills out a loan application and selects a payment plan, whether fixed monthly payments, lump sum payment, line of credit, or a combination of these. Lender discloses to homeowner the estimated total cost of the loan, as required by the federal Truth in Lending Act. Homeowner provides lender with required information, including verification of Social Security number, copy of deed to home, information on any existing mortgage(s), and counseling certificate.
5. Reverse Mortgage Processing
Lender orders an appraisal, which the homeowner pays for, to place a value on the home. The appraiser makes sure the physical condition of the property meets FHA guidelines. If any structural defects are found, the homeowner must hire a contractor to complete the repairs.
6. Underwriting
After receiving all pertinent information and data, lender finalizes loan parameters with homeowner (i.e., determining payment option, frequency of loan interest rate adjustments) and submits loan package for final approval. It can take anywhere from 4-8 weeks (sometimes sooner, sometimes longer) to underwrite a loan package.
7. Reverse Mortgage Closing
If the loan package is approved, closing (signing) of loan is scheduled. Interest rates are calculated. Closing papers and final figures are prepared. Closing costs are normally financed as part of the loan. Lender or title company has homeowner sign loan papers.
8. Reverse Mortgage Disbursement
Homeowner has three business days after signing papers in which to cancel the loan. Upon expiration of this period, the loan funds are disbursed. Homeowner accesses the funds in the form of the payment option selected. Any existing debt on the home is paid off. A new lien is placed on the home. The homeowner may use the loan proceeds for any purpose. The loan "servicer" manages the account and is responsible for disbursing monthly payments to the homeowner (if this option is chosen), advancing line of credit funds upon request, collecting any repayments on the line of credit, and sending periodic statements.
9. Reverse Mortgage Repayment
Homeowner doesn’t make any monthly mortgage payments during the life of the loan. The loan is repaid when the homeowner ceases to occupy the home as a principal residence. The loan may be repaid by the homeowner or the heirs/estate, with or without a sale of the home. The repayment obligation can’t exceed the home’s value or sales price.
Apply for a Reverse Mortgage Today!
Getting a Reverse Mortgage has never been easier. Simply call us toll free 888-599-4664 or fill out the Free Reverse Mortgage quote form. We will follow up with you within 24 hours and answer any questions you may have, and provide you with everything that is needed to begin a Reverse Mortgage.
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