Step 1. Meet with a Reverse Consultant & Begin the Application Process

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Your consultant will explain the details of a reverse mortgage. They will look at your individual situation and determine which approach works best for you. This is also a good time to have any individuals who would be involved in the decision to get the reverse mortgage to be present.

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Step 2. Independent Counseling

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Your consultant will give you a list of HUD-approved counselors. You will set up an appointment with one of them. The counseling agency will review the documents they sent to be completed. Once that is done, they will explain the details of a reverse mortgage again. They will issue you a counseling certificate that authorizes you to obtain a reverse mortgage. By law, the lender cannot incur any costs on your behalf until they have confirmation that you have completed the counseling. Once the lender receives the original counseling certificate, they can process your reverse mortgage.

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Step 3. Complete Application & Disclosures

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The reverse mortgage consultant will get together with you to sign the application to start the process. Signing the application documents DOES NOT commit you to complete the loan process and close on the reverse mortgage. It simply provides permission to get the process started.

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Step 4. Obtain A Home Appraisal

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You will be contacted by an FHA-licensed appraiser to set an appointment to come to your home. The appraiser will determine the market value of your home. They will also perform a general inspection to determine if there are repairs that might need to be done to bring the house up to the minimum FHA standards.

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Step 5. Loan Submission & Approval

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Once your appraisal report is in hand, your loan application will be submitted to the lender. An underwriter will either approve your loan, and commonly, the underwriter may request additional information before issuing an approval. The process from this point to closing is similar to a traditional mortgage and should close in about 25-30 days.

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Step 6. Funding & Cash Disbursement

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When the lender has fully approved the loan, it’s time to schedule the final paperwork signing. The signing can be done at the escrow company or in the comfort of your own home - and takes about an hour. 

 

Once signed, the executed package is returned to the lender for funding review, and you are now in the home stretch. Note that there is a mandatory 3-business-day waiting period between the date of signing and the date of funding. Typically, funds are wired directly into your bank account, but you can choose to receive the funds via check if you prefer. Congratulations, you have completed the process, and you are on your way to living better!