Easy Steps to Getting a Reverse Mortgage

Step One - Do a Little Research

This learning center has many articles on all aspects of obtaining a reverse mortgage. Read through all of the articles and make a list of questions. You may also want to visit the HUD Website and the AARP Website. Both agencies are strong advocates for seniors and both cover reverse mortgages. Talk to friends, family members, or other trusted people in your acquaintance who have experience with reverse mortgages.

Step Two - Talk to a Reverse Mortgage Lender

With all the online resources available, finding a professional reverse mortgage lender couldn't be easier. Find several that lend in your area and contact them. If you followed Step One above, you should have a list of questions and concerns ready to go. Talk to at least three reverse mortgage lenders. Note the answers to your questions. Decide which reverse mortgage lender you think is the most ethical, has the best interest rate and costs, and provides the best customer service.

Step Three - See a Counselor

If you apply for a HUD reverse mortgage, also known as a HECM, seeing a counselor is a requirement. But even if you are applying for a different type of reverse mortgage, one which does not require counseling, you should see a counselor voluntary. Counseling is an important step because reverse mortgages can are complicated. The counselors are trained by HUD and are experts on the subject. The counselor is a disinterested party, so it may give you confidence to hear your questions answered again.

Step Four - Application and Processing

You will need to fill out application paperwork and supply any documentation required by the reverse mortgage lender. At this point in the process, the lender sends an appraiser out to your house to determine its value. The loan amount is based on the value of the home, your age, and the current interest rate. Once the file is complete, it is sent to an underwriter to make sure it meets all of the investors' guidelines. This process can takes days or a few weeks depending on how many applications are in the processing queue. Be patient, and be prepared to provide the underwriter with more paperwork if asked.

Step Five - Closing

Once your loan is approved, the legal and binding forms will be sent to you for signing. You must have certain pages, such as the Deed of Trust, notarized. Normally your reverse mortgage lender and an escrow officer from a title company help you with signing the final papers. The signed papers go back to the lender and funding is set up. The funded loan is recorded onto the title of the house. Whichever type of payment or payments you selected then begin as scheduled.