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What it the typical process to obtain a Reverse Mortgage loan?

While there is some flexibility as to the sequence of events, there are also rules that dictate what steps must be completed before other actions.  A simplified listing of the steps follows:

  1. Meet with a Reverse Mortgage loan advisor to get an overview and determine if you may qualify for a Reverse Mortgage and which lender’s loan product may be best for your specific situation.  Be sure to invite any family members or trusted advisors who you might like to include in the meeting.
  2. Attend independent counseling with a HUD-approved counselor (and be sure to obtain the ORIGINAL COUNSELING CERTIFICATE).
  3. Complete a loan application with your selected Reverse Mortgage loan advisor, providing the necessary supporting documentation that will be required to proceed to the next step.
  4. Be available to meet with the appraiser who will visit your home. This step cannot take place until your loan advisor obtains an “FHA Case Number”. The appraiser will briefly measure and photograph your home and get an overview of your neighborhood.  Most of the appraiser’s work is done at his/her home office where he/she gathers information about similar properties in your neighborhood.
  5. Await updates from your loan advisor as he/she gathers information and submits the loan to the lender for review and underwriting.   This process may involve providing clarifications of information provided or additionally requested on your loan file.
  6. Upon learning that your loan has been approved or “cleared for close”, work with your loan advisor to establish a signing/closing date.  For this step, you will need to confirm the amount of monies to be drawn at close, if you have opted for an initial cash draw.  This step involves the coordination of 5 different parties – you, the loan originator, the lender, the escrow company and an independent notary, so flexibility can be important.
  7. Depending on your state, you may then enter the “3-day right of rescission period”, a time during which you may opt to discontinue with the loan process, should you determine a Reverse Mortgage is not right for you.  Otherwise, your loan is “closed” and “funded” on the business day following the end of the 3-day period.