reverse mortgage basics

The Reverse Mortgage Loan Process

Like other home loans, reverse mortgages take several weeks to complete. Here are the primary steps involved:

• Stage 1: You conduct research, attend a counseling session with a HUD-approved housing counselor, and complete a reverse mortgage loan application.
• Stage 2: Your lender orders a home appraisal, title report, lien payoffs, and your credit report and then processes the loan.
• Stage 3: Once all necessary information and documentation are received, the lender finalizes your loan package and submits it for underwriting and approval.
• Stage 4: When your loan is approved, a “closing” is scheduled, where you receive, review, and sign the pertinent loan documents.
• Stage 5: Following closing you have three business days to reconsider and cancel the loan. After this time passes, the loan funds are disbursed.

Now let’s examine the most common type of reverse mortgage -- the Home Equity Conversion Mortgage or HECM. Continue to “How HECMs Work.”