Understanding the Reverse Mortgage Process

Reverse mortgage help is here!  At Generation Mortgage, we are committed to helping you understand the reverse mortgage process so you can decide if a reverse mortgage is right for you and your family. As you are moving forward with your reverse mortgage, take time to talk to your family and financial advisors.

While one of our Consultants will walk you through the reverse mortgage process step-by-step, it’s good to have a clear understanding of the basic process. Below is a review of the major steps involved in getting a reverse mortgage.

Counseling

As part of the reverse mortgage application process, you are required to seek counseling with a third-party, HUD-approved counselor. This may be conducted face-to-face or by telephone. The counselor will provide you with an explanation of the legal and financial obligations of the program as well as the alternatives available to you. Upon completion of the counseling, you will be given a certificate to present to us as proof that you have completed your counseling consumer education session. We can provide you a list of names and phone numbers of the HUD counselors in your area, to help you get started.

Application

Next, you will complete and sign the loan application. Once you have submitted your completed application, you will receive a disclosure for the estimated total cost of the loan, as required by federal Truth In Lending Act.

Processing/Appraisal

A professional appraisal will be used to determine the value of your home. The appraiser makes sure the physical condition of the property meets FHA guidelines. This appraisal will be used to calculate the loan amount you can receive with your reverse mortgage.

Underwriting

After receiving all documentation, we will process and submit the loan package for final approval. The underwriter will review the documentation to ensure it meets all FHA guidelines.

Closing

Once approved, final figures and closing papers are prepared, and a closing date is scheduled. After the closing date, you have three days to cancel the mortgage in the event you change your mind.

Disbursement

Once your closing is completed, you will receive the proceeds from your loan– in the form of a lump sum, monthly payments or a line of credit – depending on the product you chose.

After the Closing

After the reverse mortgage closing process has completed, your responsibilities with a reverse mortgage are similar to those associated with a traditional mortgage.

You are expected to:

• Pay property taxes in full and on time
• Keep adequate property insurance and keep the policy up-to-date
• Maintain the home in good repair
• Continue living in your home as your primary residence