What To Expect From The Reverse Mortgage Process

Following are the five steps recommended for getting a reverse mortgage funded and closed. The initial education piece is essential so that you can be confident you are making a sound financial decision. Reverse mortgages are complicated lending products. Be sure you have considered all your options.

Step One, Education - The Best Reverse Mortgage learning center has all of the articles you need to get a solid education base before you start shopping. You can learn about the types of reverse mortgages, your equity distribution options, how reverse mortgage rates work, and the possible costs associated with the loans. There are also articles dealing with consumer protections, choosing a counselor, and a glossary of useful terms. Be sure to read through all of the information. Write down any questions that come up so that you can discuss them with your counselor or lender.

Step Two, Find a Reverse Mortgage Lender - Use this link, reverse mortgage lender, to make finding a reverse mortgage lender in your area easy. Start by clicking on your state. Complete the four questions about your property. Submit your contact information and view the lenders that service your area. It is that simple. You may want to contact more than one lender so that you can compare costs and interest rates.

Step Three, Counseling - If you will be applying for a HUD Reverse Mortgage, also called HECM, counseling is mandatory. If you are applying for one of the other types of reverse mortgages, counseling may not be required, but is highly recommended. HUD trains counselors to check your understanding of the potential transaction and to offer you alternatives. To find a HUD-trained counselor in your area, you can go to the HUD Website or ask your reverse mortgage lender for a recommendation.

Step Four, Application And Processing - Your reverse mortgage lender takes a complete application from you and collects any documentation required. Once you have made your application, the lender's staff begins processing the loan. Processing will likely include an appraisal of your home to determine its value. There may also be property inspections. Processing can take several weeks depending on how busy the lender is at the time you apply.

Step Five, Underwriting, Documents, and Funding- Your processed application goes through a final underwriting. Once the loan is approved by the underwriter, your file is ready for documents. The documents are the Note, Deed Of Trust (or Mortgage, depending on your state), and disclosures the reverse mortgage lender needs to record a lien against your property. You will sign these papers with a notary and send them back to the funding department. A funder will then set up your equity distributions and close the transaction with an escrow officer.