The Process of Getting a Reverse Mortgage
The Borrower hears about a Reverse Mortgage from a friend or relative, on TV, on the Internet, on the radio or by mail and makes the conscious decision to seek out more information.
Borrowers should seek out a qualified Reverse Mortgage professional. Knowledge is extremely important. The Reverse Mortgage professional should be able to explain and educate the borrower on both the pros and cons of Reverse Mortgages. During the meeting with the Reverse Mortgage professional the borrower should learn about whether or not the borrower is eligible for the Reverse Mortgage and specific numbers related to the different Reverse Mortgage programs.
HUD regulations require that all borrowers seeking a reverse mortgage must complete counseling form a HUD approved counselor. Depending on the HUD counselor, the HUD counseling can either be completed at the HUD counselor’s office or over the telephone. The HUD counseling requirement is intended to be conducted by an independent 3rd party at arms-length from the lender and the Reverse Mortgage professional. During the borrower’s HUD counseling session the borrower will be able to validate all of the information received from the Reverse Mortgage professional.
Action / Application:
Once the borrower makes the decision to obtain a Reverse Mortgage a Reverse Mortgage professional will meet the borrower at the office or the borrower’s home and help guide the borrower through the application. A good Reverse Mortgage professional will leave the borrower with a complete copy of all of the documents that the borrower signed. The borrower should take time to review the documents with a trusted advisor or family member.
After the borrower signs the Reverse Mortgage loan application, FHA will assign a case number and the Reverse Mortgage lender is now permitted to order your appraisal. Meanwhile the Reverse Mortgage lender will begin to process your paperwork. This process includes the appraisal, title report, and checking the balance of any liens/mortgages to be paid. We will be in contact regularly during this time.
When the processing and all paperwork is complete, the lender forward your file to the loan underwriter for final approval and will work to satisfy any conditions/requirements needed to close the loan.
Upon receipt of the your HUD counseling certificate the lender will contact you to arrange for an appraisal of your property. Reverse mortgages use a full FHA appraisal. The value of your home is based on what comparable properties in your neighborhood have sold for recently.
Closing & funds disbursed:
Once your loan has been approved by underwriting the lender will contact you to arrange for the signing of your final loan documents. At this time the lender will confirm your payment plan or partial lump sum (how you want to receive your money). Once you’ve signed the closing documents you have three business days to cancel the loan if you should chose to do so. After this time has passed your funds are usually distributed after another 5-7 business days depending on the payment option chosen.