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The Reverse Mortgage Process
Ten Steps to Success
Like any home loan, there are steps you’ll need to follow to obtain a reverse mortgage loan. Your Retire Right Mortgage Specialist will be with you every step of the way, but the following information will give you more clarity into the process.
1. Homework
Conduct thorough research and collaborate with a company that has expertise in reverse mortgage loans, such as Retire Right Mortgage. Our Reverse Mortgage Specialists will carefully evaluate your unique financial circumstances and help identify the most suitable solution for your needs.
2. Education
You should take the time to learn about reverse mortgages before you decide to proceed. Additionally, each person that applies for a reverse mortgage must receive independent, third-party counseling from a Department of Housing and Urban Development (HUD) approved counselor. This will help you determine if a reverse mortgage loan is the right option for you and will ensure that you understand the obligations of the loan.
3. Application
If you decide a reverse mortgage could be a good option, the next step is to sign your reverse mortgage application and submit the necessary supporting documents to your Reverse Mortgage Specialist. They will obtain your credit report, prepare your application, and arrange a meeting with you to thoroughly review the details and address any questions or concerns that you may have. They will also give you a comprehensive list of additional requirements for your loan.
4. Processing
After you complete the application and supply the required documents, the loan processing phase begins. At this point, we will order the appraisal, title report, tax history, and flood certification. We will review all the documentation you provided and prepare your file for underwriting. Your Reverse Mortgage Specialist will provide regular updates on the progress of your loan and promptly handle any potential issues that may arise.
5. Underwriting
Once all the necessary documentation is received for your file, it will be forwarded to an underwriter who will make a decision on your loan. We will inform you if there are any additional requirements that need to be fulfilled in order to gain approval.
6. Approval
Once the underwriter has granted approval for the loan closing, you and your Reverse Mortgage Specialist will collaborate to decide how you’ll receive your proceeds. This is typically either one or a combination of options, including a lump sum payment, monthly cash flow payments, or access to a line of credit.
7. Closing
We’ll set up an appointment to meet with a notary and sign your closing documents. You will have three days after signing to cancel the transaction if you decide, unless it is a loan to purchase a home.
8. Funding
You should receive your initial proceeds requested at closing within three business days. You may also begin to request withdrawals from your new line of credit if an amount was available at closing.
9. Going Forward with Your Reverse
Your reverse mortgage will not have any required monthly payments. You must still live in the home at least 6 months per year, maintain it, and pay taxes, insurance, and applicable association dues.
10. Taking Care of the Loan
The reverse mortgage will become due if you do not use the home as your primary residence, you sell the home, or the last borrower passes away. Your heirs may keep the home by refinancing or paying the outstanding reverse mortgage balance if it is less than the home’s value. If the reverse mortgage balance is greater than the value of the home, the heirs may choose to purchase the home for 95% of the appraised value.
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Myths and Facts
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*This advertisement does not constitute tax advice. Please consult a tax advisor regarding your specific situation. The homeowner is still responsible for paying property taxes, homeowner’s insurance, applicable association dues, and for maintaining the property.