What are the Steps to Getting a Reverse Mortgage?
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The first step to getting a reverse mortgage is education. You need to learn everything you can about what a reverse mortgage is and the different types of reverse mortgages that are available. While you may have initially heard about reverse mortgages from an advertisement, friend or news article, you should follow up by contacting organizations such as the National Reverse Mortgage Lenders Association, AARP, and HUD for more information on reverse mortgages.

The second step to getting a reverse mortgage is to get counseling from a local reverse mortgage counseling agency that is approved by HUD. You can also contact a counselor through another agency such as the AARP or the National Foundation for Credit Counseling. It is a requirement that you receive counseling in order to receive any reverse mortgage. This counseling session can be conducted in a face to face meeting or over the telephone.

The third step is the application and disclosure. The borrower will fill out a loan application and select the payment plan option that best fits their needs. The lender then is required by law to fully disclose to the borrower the total estimated cost of their reverse mortgage. The borrower is also required at this point to provide the lender with any required information such as a copy of the deed, verification of their social security number, and any current mortgage information. This step can sometimes occur before the counseling session, the full application process cannot be started until the counseling has been completed and a certificate verifying their counseling is submitted to the lender.

The fourth step is processing. This is when the lender has the home appraised, which the borrower is required to pay for, and the physical condition of the property is evaluated in order to make certain that it meets the FHA requirements. If there are any structural defects found at this point, the borrower must have them repaired before the reverse mortgage can close.

The fifth step is the underwriting. Once the lender has received all of the necessary data, they finalize the details of the loan with the borrower. This includes determining the payment option, frequency of the loan interest rate adjustments, and other such loan terms. This part of the process may take anywhere from a few weeks to a few months.

The sixth step is the closing. Once the entire loan package is approved by both the lender and the borrower, then the actual signing of the loan is conducted. This is when the final interest rates are calculated and the final closing papers and figures settled. The costs of the closing are usually financed into the loan. The actual signing of the paperwork at the closing concludes the loan process.

The seventh step to the reverse mortgage is the actual disbursement. The borrower is given three days after signing the papers in which they can change their mind and decide to cancel the loan. After the three days, the actual loan amount, or the first payment depending on what payment option was chosen, is actually given to the borrower.
After that, the only thing left for the borrower to do is to spend their money.

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