Reverse Mortgage Application Steps
From Start To Funding
Learn What to Expect Through the Reverse Loan Process
The list of reverse application steps we provide here is meant to help set borrowers expectations of the overall reverse mortgage process. Whether they’re actively considering a reverse mortgage loan as a solution to immediate financial challenges or as part of their retirement plan, we encourage them to review these steps in order to prepare themselves for the journey ahead.
While the following reverse application steps represent the loan process most borrowers should expect, it’s also worth noting that not every journey looks exactly the same, due to individual circumstances.
It’s called a reverse mortgage because of the way the loan works, where instead of the borrower paying back the lender for money borrowed, the lender pays the borrower money based on the equity in the home. Since it’s inception, HECM reverse mortgages have helped millions of U.S. homeowners access their home equity when traditional HELOC loans, typically requiring a significant and steady income source, were not a viable option.
Ask about our face to face in-home consultations and free appraisals for qualified Texas homeowners
Important Disclosure
- The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and
- Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees.
- The loan balance grows over time and interest is charged on the outstanding balance
- At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds
- Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment.
Reverse Application Steps 1 – 4
- Step 1. Explore your reverse mortgage loan options
With different types of reverse mortgage loans available, like the standard HECM, HECM for Purchase, Jumbos for higher value homes and even hybrid reverse products for those under age 62, it’s good to explore your options, before you decide. - Step 2. Choosing a trusted reverse mortgage lender
The HECM reverse mortgage family of loans have rates and fees that are heavily regulated to protect borrowers from being taken advantage of, creating a balanced playing field amongst lenders. This means that your choice in lenders is more rooted in the quality of service, accessibility and trust. So, take time to get to know the lender you are dealing with to ensure they are actually motivated by what’s in your best interest, not theirs. - Step 3. Attend the required reverse mortgage counseling
Borrowers are required to attend a a HUD-approved counseling session. The counselor reviews the loan details to ensure borrowers understand the loan terms, costs, and potential risks. - Step 4. Submission of the loan application
After completing the first three reverse application steps, borrowers will need to submit an application to the lender. The lender will review the application and determine if the borrower(s) are qualified for the reverse mortgage home loan they have applied for.
Reverse Application Steps 5 – 8
- Step 5. Home Appraisal
Once the borrower is determined to be qualified, the lender schedules a licensed appraiser to determine the current market value of your home. The appraised value is one of the factors used to calculate the amount of money you can borrow. - Step 6. Processing and Underwriting
After the appraisal process has been completed, the lender processes the loan documents and creates the completed loan package ready for both borrower and lender signatures authorizing the closing process. - Step 7: Closing
The closing process consists of reviewing and signing the completed loan package. If you have chosen a local lender to work with they may come to your home to perform this part of the process. If you are dealing with an out of state lender they may send a notary republic with your loan package to complete. - Step 8: Disbursement of funds
At the completion of reverse application step 7 the signed loan package is delivered to the title company who then prepares and distributes the loan funds. The funds may be received as a lump sum, line of credit, in monthly payments, or a combination of these options.
Want to get an immediate estimate of the amount you may qualify for?
Advantages of Aging In Place
What is a Reverse Mortgage?
HECM Reverse Mortgage FAQs
Choosing a Reverse Lender
Reverse Application Steps Review
Reverse mortgages can be a great option for qualified Texas homeowners looking to augment their retirement income or have additional financial resources that allow them to maintain or improve the freedom and lifestyle they’ve earned over years of hard work and sacrifice.
If you would like to have a free, no obligation discussion about the details of the reverse mortgage loan products available, do not hesitate to give us a call, we’d love to meet with you at your home or have a talk on the phone to help you learn everything you need to know about the HECM reverse mortgage loan.
For more information give us a call at (800) 215-0891
Or use our reverse mortgage calculator to get an estimate of the proceeds you may qualify for!
Mortgage and Insurance Solutions Inc. NMLS #1124365