What is the Reverse Mortgage Process

Obtaining an HECM Loan

Unraveling the steps to secure a reverse mortgage is easier than you might expect. Explore the detailed process below, or connect with David Blatt today for valuable insights into how it all unfolds.

Awareness:

Whether from TV, radio, online sources, mailers, or your own research, you’ve become aware of the reverse mortgage loan.

Education:

Meeting with a qualified Mortgage Loan Originator is crucial. Here, you’ll delve into your specific numbers, potential qualifications, and receive an analysis tailored to your situation.

Counseling:

Mandatory counseling from an independent, HUD-approved agency is required for all reverse mortgage borrowers. Typically, the borrower covers this fee. Ensure you complete this step promptly, often achievable over the phone. You’ll receive two certificates, one for your records and the other for our office.

Action / Application:

Meet with your Mortgage Loan Originator to determine if a reverse mortgage aligns with your needs. Our reverse mortgage experts can meet you at our office, your home, or via phone to guide you through the application process. You’ll receive a comprehensive set of documents for your review, along with trusted financial advisors or family members.

Financial Assessment:

HUD mandates a financial review to ensure the long-term viability of the HECM loan. Each applicant’s credit history, property tax payments, and other factors are evaluated to assess their capacity to meet ongoing loan obligations.

The Appraisal:

Upon obtaining your HUD counseling certificate, we’ll arrange for an appraisal of your property, covered by the borrower. Reverse mortgages require a full FHA appraisal, basing your home’s value on recent sales of comparable properties in your neighborhood.

Processing:

The lender initiates paperwork processing, including appraisal, title report, lien/mortgage balance checks, and verification of income and credit factors. Expect regular communication during this phase.

Underwriting:

Once processing and paperwork are complete, your file is forwarded to the loan underwriter for approval. We work to meet any conditions or requirements necessary for loan closure.

Closing & Funds Disbursement:

If your loan is approved, we’ll arrange for the signing of final loan documents. At this stage, we’ll confirm your payment plan or partial lump sum preference. After signing, you have three business days to cancel the loan if desired. Post-cancellation period, funds are disbursed according to your chosen payment option. HECM for Purchase loans operate differently; refer to HECM for Purchase Guidelines for details.