Pre-Application

No Obligation Consultation

In this step, you will talk to a loan specialist who will familiarize you with your reverse mortgage options and answer any questions that you have about the product. They will also be able to supply you with information about the approximate amount of money you will be able to access. Your consultation will be followed up by a free, personalized reverse mortgage information packet sent to your home.

Pre-Loan Counseling

During this step, you must attend financial counseling with a HUD-approved couselor. This counseling serves as a safeguard for you because it allows you to discuss your situation with a non-biased third party. During this session, some of the topics discussed are:

• Alternatives to a reverse mortgage.
• How a reverse mortgage differs from traditional financing.
• All of the costs associated with reverse mortgage financing

This session typically lasts from 45 minutes to an hour, depending on how many questions you have for the counselor, and can be performed either face-to-face or over the phone.

Processing

Application

This is the part of the process where your loan specialist will get a little more information from you, including your social security number, copies of your identification, and a utility bill (to prove residence). This is also when the preliminary disclosure package will be sent out to you, which will contain documents that you need to sign and copies for you to keep for your records. The paperwork will include a breakdown of the loan terms, including the fees, as well as various disclosures regarding applicable state and federal laws. It is important to read through and understand all of these documents. If you have questions on any of the paperwork, be sure to get clarification from your specialist before you sign them. Although these papers do require your signature, they absolutely do not obligate you to do anything.

Click here for information about understanding your disclosures

Appraisal

At this point, there will be an appraisal done on your home. This is where a licensed appraiser will come to your home to examine its features and take pictures. Your home will be compared to other homes in the area that are similar in size, layout, and features in order to evaluate its fair market value. Although the appraiser is not an engineer, they are also responsible for determining whether the home's condition meets FHA's requirements. Your home must be in good repair and free of chipping paint. If there are any necessary repairs, these will be noted on the report and must be completed before your reverse mortgage can close.

Underwriting

After the appraisal is completed and the preliminary paperwork has been signed, the loan will then be sent to the lender to be underwritten. What this means is that the lender will review all loan documentation to ensure that it is accurate and complete. After reviewing the loan, the underwriter will provide your loan specialist with a conditional approval that includes a list of requirements to be met before the loan can close. These could include updates to the title of your home or homeowner's insurance or additional documentation of information supplied during the application. Upon receiving these conditions, the underwriter will issue either an updated approval or the clear to close.

Closing

After the underwriter issues the final approval, you will be able to close on your loan. You will receive a call from a closing coordinator to set up a closing date. At the closing, a notary or an attorney will be present to witness the signing of the final documents. After signing your loan documents, you will have a three day right of rescission period. If for any reason you would like to cancel your reverse mortgage, you have a right to do so during these three days.

Funding

After the three day right of rescission period, your loan will fund. The wire to pay off your current mortgage and any other debts listed on the settlement statement will be sent out at this time (if applicable). Any funds that you chose to receive immediately will also be disbursed at this time. If you elected to receive your money as a monthly disbursement or as a credit line, those funds will become available within thirty to sixty days.