Reverse Mortgage Loan Process
Reverse Mortgage Loan Process
A Reverse Mortgage Loan frees homeowners 62 years of age and older from the obligation of monthly mortgage payments* by allowing them to borrower against the equity in the home. Unlike a traditional “Forward” mortgage that makes payment from your household income, the Reverse Mortgage uses the equity in the home to make a payment every month so the loan balance goes up each month. The first step is understand the Reverse Mortgage Loan Process. If you would like to apply for a Reverse Mortgage please call us at 302-703-0727 or APPLY ONLINE
How Does the Process work for Obtaining a Reverse Mortgage?
The Reverse Mortgage Loan Process has 8 steps that a borrower must go through in order to complete the loan process. Each of the 8 Steps are outlined below.
Step 1 – Education & Consultation
Begin by contacting a Primary Residential Mortgage Professional who specializes in Reverse Mortgage Loans such as John Thomas by calling 302-703-0727. Our Reverse Mortgage Loan Officer will do the following:
- Present you with a full range of reverse mortgage products that available
- Clearly explain your responsibilities under the terms of a reverse mortgage, including paying property taxes on time, maintaining homeowners insurance and maintaining your home in good condition.
- Carefully review your income, assets and expenses to help you assess whether you can meet these obligations and determine whether the reverse mortgage loan is the best financial product for your situation.
The Reverse mortgage can be used to purchase a new home or refinance your current home. Using a Reverse mortgage for purchase allows you to keep more money in your pocket and still have no monthly mortgage payment. If need to refinance, you can pay off current forward mortgage and/or get cash out or a home equity line of credit. We will also discuss the common misconceptions about reverse mortgage loans.
Step 2 – Reverse Mortgage Counseling
A Counseling session with a HUD-certified reverse mortgage counselor is required on a FHA insured reverse mortgage loan. These loans are also commonly called Home Equity Conversion Mortgages or HECM for short. Your Reverse Mortgage loan officer will provide you a list of counseling agencies in Step 1 of the process. You will have options for in office counseling or over the phone counseling. Once you complete the counseling you will be provided with a certificate that you must provide to your Reverse mortgage loan officer in order to move to Step 3 of the loan process.
Step 3 – Reverse Mortgage Application
Reverse Mortgage Loan Applications are simple forms that outline your financial situation and your intention to refinance or purchase. The application can be completed in our office or from your own home using our informative secure online portal.
Step 4 – Providing Documentation
You will then provide paperwork supporting the loan application that is being submitted. This typically includes income documents, tax returns, bank statements, homeowners insurance policy. Primary Residential Mortgage as your Reverse Mortgage Loan lender will order an Appraisal on the property and request a title search from the title company of your choise.
Step 5 – Reverse Mortgage Loan Process – Underwriting
Your Loan file is submitted to our loan underwriter once we have gathered all the necessary documentation and reports from Step 4. The underwriter will analyze your loan file for creditworthiness and risk. The underwriter will issue a conditional approval and may request additional documents to support the credit request.
Step 6 – Clear to Close
After the underwriter conditions are met, a “clear to close” is issued and the closing documents are prepared. This typically takes three to five days. Once completed the closing is able to happen and is scheduled if it has not already been scheduled with the title company.
Step 7 – Closing
An appointment to sign the reverse mortgage closing documents is scheduled at a convenient time and place for you. A Notary will be present to notarize the final documents unless you are closing in an attorney state, then the closing attorney will conduct the closing and notarize the documents.
Step 8 – Funding the Reverse Mortgage Loan
After the rescission period, the lender sends funds to pay the outstanding mortgage balance on a refinance and any other arranged third party payments, including any payment to the borrower. On a purchase transaction, the funds are disbursed at closing toward the purchase of the home.
How Do I Apply for a Reverse Mortgage Loan?
If you are interested in applying for a Reverse Mortgage Loan to purchase or refinance a and home and you are 62 years or older then simply give the John Thomas Team of Primary Residential Mortgage a call at 302-703-0727 or APPLY ONLINE