Step 1: Education and Research
Contact one of our knowledgeable Reverse Mortgage Specialists and we can create a comparison of available Reverse Mortgage programs that fit your specific situation. Within this consultation, we will help you to evaluate each option available.
We recommend you consult other organizations for information such as: The National Reverse Mortgage Lenders Association (NRMLA) which is the “national voice and conscience of the reverse mortgage industry.” You can find them at http://www.reversemortgage.org.
Another great industry resource is the U.S. Department of Housing and Urban Development (HUD) found at http://www.hud.gov.
Step 2: Counseling
Once you have completed your research and have determined that you want a Reverse Mortgage, you must attend Reverse Mortgage Counseling. Counseling is mandatory; however, we look at it as an educational checkpoint to confirm your research. There is a cost associated with this mandatory service that averages $125 per session. Pending on available State and Federal funding, this cost may be waived by the counseling organization. Sessions generally range between 1-2 hours and are often done over the phone, but you have the right to receive face-to-face counseling if desired.
Step 3: Application
Upon completion of Reverse Mortgage counseling, it is time to schedule an appointment with one of our knowledgeable Reverse Mortgage Specialists who will guide you through the paperwork package. The application can be made in person with a Reverse Mortgage Specialist or via mail.
Step 4: Appraisal and Escrow
Once we have received your signed and dated counseling certificate and have completed the application process, we will coordinate for an appraiser to go out to your home. The appraiser will follow a process to determine the value of your home. At this time we also open escrow to order a title report and ensure that there are no Federal or State tax liens on the property. It usually takes 1-2 weeks to receive a completed appraisal and title report.
Step 5: Underwriting
Once we have received all of the preliminary reports, and inspection reports, and reviewed the loan package for completeness and compliance, we submit the loan for review and approval from the underwriter (the person who approves the loan). The underwriter then goes into a review process and may request further documentation.
Step 6: Closing
When your loan receives final approval we will set up a signing appointment at the Title Company or a Mobile Notary who will go to a location convenient to you. Signing the final loan documents takes about an hour. Once the documents are fully executed they will be returned to Guarantee Mortgage for funding.
Step 7: Disbursement
By law, refinance loans have a three-day right of rescission to cancel the loan. After the three-day “waiting” period, funds are disbursed and recorded with your County. Purchase loans are typically recorded and funded within two business days.
The Bottom Line
Reverse mortgages have two primary qualification criteria—you must be at least 62 years old, and you must own a significant amount of equity in your home.
- While the specific percentage of equity required varies across lenders, typically you’ll need at least 50%.
- There is no credit score or income requirements for reverse mortgages.