You may have heard about the reverse mortgage loan on TV, on the radio, online, by receiving a mailer, or been referred by your Financial Planner or CPA.
Meeting with a qualified Mortgage Loan Originator like myself is key. This is where you learn about your specific numbers, what you qualify for, and receive an analysis of your unique situation, in most cases this is called a proposal and there will be an I.D. number on it for your next step of counseling.
Counseling is required from an independent third-party, HUD-approved counseling agency, for all reverse mortgage borrowers. This fee is paid by the borrower and runs up to $200. It is important to complete this as soon as possible. Counseling can be done, over the phone, in person, or over zoom in most instances. A certificate of completion will need to be implemented by the counselor and send to the borrower, and the Loan Originator for compliance purposes.
After counseling is complete and you have decided to proceed with getting a reverse mortgage, an application will be initiated unique to you. Going over the details of your application can be done, in person, over the phone, or over video conferencing with your Mortgage Loan Originator. and decide if a reverse mortgage is right for you. You will be asked to wet sign or e-sign the application to get the loan into processing. You will be e-mailed or printed a complete copy of ALL the documents for you and your trusted financial advisors (i.e. CPA or attorney) or family member(s) to review.
To help ensure the long-term success of the HECM loan over time, HUD requires a financial review of each applicant’s credit history, property tax payments and other credit factors that will be evaluated to measure a borrower’s willingness and financial capacity to meet the ongoing obligations of the loan.
Upon receiving your HUD counseling certificate we will contact you to arrange for an appraisal of your property. The appraisal is paid by the borrower. 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.
The 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. Also, verification of income and other credit factors are gathered at this time. We will be in contact regularly during this time.
When the processing and all paperwork is complete, we forward your file to the loan underwriter to determine if the loan will be approved and will work to satisfy any conditions/requirements needed to close the loan.
Closing & Funds Disbursed
If your loan has been approved by underwriting, we will contact you to arrange for the signing of your final loan documents. At this time, we 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 choose to do so. After the cancellation (rescission) period has passed, your funds are distributed based on the payment option you chose at closing. HECM for Purchase loans do not have a rescission period.