Reverse Mortgage ProcessThe entire start to finish reverse mortgage process can take anywhere from 4 to 6 weeks after the initial application is started. Most senior borrowers spend the most time in the loan process trying to educate themselves and determining which reverse mortgage company is right for them.
- Initial Reverse Mortgage Application
After a senior decides that a reverse mortgage is the right decision and decides on a lender, the senior reverse mortgage loan agent will take down the information and provide information about what to expect as far as estimated fees and the rough process. A borrower can still back out at this point without being charged.
- Reverse Mortgage Counseling Session
After an application is taken, all borrowers on the reverse mortgage will need to take a HUD approved counseling session. This can be phone over the phone or in person with a HUD approved counselor. After the session is completed, the borrower receives a signed HECM Counseling Certificate.
A licensed real estate appraiser will go out to the home, (sometimes will request permission to inspect the inside) and appraise the property based on specific FHA guidelines.
At this stage, the reverse mortgage lender will verify ownership of the property with a title search and prep the loan for title insurance. The lender will make sure there are no existing liens that will delay the loan, and verify name on the property or other issues regarding the title that may cause a delay for the reverse mortgage loan at closing.
The last final step in which all parties signs documents finalizing the reverse mortgage. The borrower will be able to review final charges, rates and fees. After the documents are signed, the borrower is allowed 3 business day period of "right of recission" in which he or she can change back out of the loan. After right of recission period ends, funds are sent to the borrower, finalizing the reverse mortgage.