We Understand that the process of obtaining a mortgage can prove to be very tedious and complex at times. We hope the information below will help to calm any anxiety by walking you step-by-step through the process. These steps are just a guideline and may vary depending on loan and state in which loan is being originated.
# 1 – Consultation
The first step in this process is speak with a knowledgeable reverse mortgage professional to learn how reverse mortgage works. Here the goal is to address all questions and concerns and to discuss eligibility and if a reverse mortgage is right for you.
#2 – Counseling
A proposal will be given to you by your reverse mortgage professional that should include a list of HUD approved counselors. You will then select a counseling agency of your choice from the list and schedule an appointment to receive reverse mortgage counseling. It is mandatory that you undergo counseling. The purpose of this session is to ensure that you thoroughly understand how a reverse mortgage works and that your mortgage professional is being transparent and unbiased with advise being given to you. The agency will send you some preliminary documents to complete and become familiar with and might also ask you to forward any written proposals received from your mortgage professional. During the counseling session, the counselor will once again go over the basics of a reverse mortgage and will address specifics relating to your situation. When you’ve completed counseling, your counselor will send you a counseling certificate with an addendum that you would need to sign as proof that you’ve completed counseling. Thereafter, you would have a 7-day rescission (cooling-off) period designed to allow you time and space to digest the information and study all of your options. At the end of this period, you’re now free to move forward with obtaining a reverse mortgage, if you so choose.
#3 – Application
Rescission ends…now it’s time to move forward with the application. Your mortgage professional will gather information necessary to complete your application and will discuss options for receiving your funds, if applicable. Once the application is signed, it is now time to submit it to underwriting for processing.
# 4 – Processing & Appraisal
At this stage, the processor will make sure that all required documents are obtained. Appraisal is ordered to determine the value of your property. Escrow orders title information to ensure that the property has no existing liens recorded. When appraisal report is received, it is packaged with all necessary documents and then submitted to underwriting for review.
# 5 – Submit Loan & Underwriting
Underwriter analyzes the file to make sure that it meets lender’s criteria. It is typical for underwriter to request additional information if further clarification is needed to advance your file. Once underwriting is completed, an approval or denial is communicated to the mortgage professional.
# 6 – Loan Approval
When loan approval is received, we would make sure to explain the details of your approval. Note that sometimes, an approval may contain a proposal different than what was on your application.
# 7 – Loan Closing
If approval terms are accepted, we move into the closing phase of the loan. Typically, a notary will contact you to set up a good time and place to meet to sign loan documents. Once documents are signed, you would have a 3-day rescission period before it funds. During this period, you may decide to change or rescind the loan without any penalties. When the loan funds and records, if any monies are due to you, it will be wired into your bank account…unless you’ve made alternate arrangements.
# 8 – Loan Servicing
When your loan closes, it is forwarded to the servicing department or company. Approximately 30 days after closing, you will receive a packet of information with details about your loan servicing. If you’ve elected scheduled disbursements, the details would be included in your packet. This is a very important packet of information that you may need to hang on to for future reference.