What Is The Reverse Mortgage Application Process?

The application process for a reverse mortgage loan usually takes between 30 days and 45 days from beginning to end and has five major processes involved. But, the longest part of the process is the decision making stage, which leads up to the loan application.

An average reverse mortgage applicant starts thinking of a reverse mortgage loan about six months before they complete an application. The homeowner generally researches reverse mortgage loans using various resources for several months. The next thing they do is to request information from a reverse mortgage specialist. Then he or she may invest at least one month meeting with the expert in person and checking the good faith estimate as well as the other pertinent documents for the loan.

Step 1. Initial Reverse Mortgage Loan Application

The reverse mortgage loan application will legally authorize the lender to start the application process. However, the lender can’t incure any of the cost on your behalf until counseling or step two of the process has been completed. The reverse mortgage application isn’t binding and could be cancelled at any time during the loan process. The application would determine the reverse mortgage fees, loan amounts, as well as interest rates.

Step 2. Reverse Mortgage Counseling

Although the reverse mortgage loan has been finished, the lender isn’t allowed legally to incur costs on behalf of the applicant until the latter has given an HECM Counseling Certificate that’s been signed. This will be proof that the applicant has gone through the required couseling session with a counseling agency that’s been approved by HUD. The counseling could be done before or after the initial loan application.

Step 3. Appraisal

The appraisal creates the legal value of the property of the applicant. The appraisal for the reverse mortgage loan should be performed by an appraiser that’s approved by the FHA and it should adhere to a certain FHA format. This implies that even when a homeowner already has an appraisal, it would most probably need to be reappraised at this time in the process.

Step 4. Underwriting

The lender would confirm the legal ownership of the applicant of the property by performing a title research and buying title insurance. They would also work with the applicant to clarify any concerns with bankruptcies, unpaid liens, or trust. When the lender has completed underwriting and has approved the application, the status will become clear to close. This implies it’s all finished and the closing date will then be set finally.

Step 5. Closing

The lender as well as the applicant will set a closing date wherein an attorney or a notary will meet with the applicant so they could sign the documents for the final closing. This is the opportunity of the applicant to check the closing paperwork to ensure that the fees, interest rate, as well as the loan amount are what you expected. After you sign, the application will then go into a right of rescission period which will last for three days. This implies that even if the closing has already happened, the reverse mortgage Columbia loan applicant could still decide to cancel the application without facing any penalty for three business days following the closing.

Following the waiting period, the title firm would give a check to the homeowner if the proceeds are available from the loan. In case the applicant was making use of a reverse mortgage loan to pay off a mortgage, the title firm would send the amount for the mortgage payoff to the lender.

Call Reverse Mortgage Specialist if you wish to know more about the reverse mortgage loan process.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/