The Process of Getting a Reverse Mortgage Loan

Getting a reverse mortgage is easy when you understand what is required of you and what you’ll need to get a reverse loan. Here is information on the step-by-step process used to get a reverse mortgage loan.

1. Research: Gather information and contact top reverse mortgage lenders to determine if a reverse mortgage is right for you. If necessary involve others that you trust, a family member, friend or adviser.

2. Counseling: The U.S. Department of Housing and Urban Development (HUD) requires that you receive third-party counseling from a HUD-approved reverse mortgage agency. The counselor will ensure that you understand your reverse mortgage options including pros and cons of reverse mortgages and disadvantages of reverse mortgages.

3. Application: Complete the application and determine how to receive reverse loan payment. Options are as follows:

• Lump Sum
• Monthly Payments (your choice of loan advances for a specific period, or for as long as you live in your home)
• Line of Credit (unscheduled payments or installments, at times and in amounts of borrower's choosing until the line of credit is exhausted)
• Any combination of the above three choices

4. Processing: Your reverse mortgage loan application is processed by your lender, who also orders an appraisal, title report, lien payoff report, and credit report. The appraiser will determine the value of your home and uncover any structural defects or repairs that may be required following the closing of the reverse loan.

5. Underwriting: Upon receipt of necessary information and documentation your reverse mortgage lender will finalize the parameters, package and submit loan for underwriting and final approval.

6. Closing: After loan approval a final signing is scheduled. The loan's initial interest rate is calculated and, in most cases, closing costs are financed by the loan. You are presented with closing papers and final figures for signing.

7. Disbursement: Following closing you have three business days to cancel the reverse mortgage loan. Once this period has passed the loan funds are disbursed and the loan has been applied to any previous debts on the property. You begin receiving payments according to your selected payment option.

8. Repayment: There are no monthly payments to be made during the life of your reverse mortgage loan. The reverse mortgage becomes due and payable in full once: 1) the home is no longer being used as a primary residence, 2) it is sold, or 3) the borrower passes away. Upon the death of the borrower, the reverse loan may be repaid from the sale of the home or by refinancing the existing reverse mortgage. All remaining equity belongs to the heirs/estate.

Make the investment of your home last a lifetime with a reverse mortgage. Click here to speak with one of our representatives.