1. Loan Origination: The first step when beginning the process of a Reverse Mortgage is generally to meet with a representative of a lender, known as a loan officer, so that they can provide you with information on the process such as how much money you will be eligible to receive based on your age, home value, and current interest rates. At this point, you decide whether to go forward with the Reverse Mortgage loan.
How Long: This is a meeting that could last 15 minutes or 1 or more hours depending on the questions you have for your loan officer.
2. Counseling: If you do go forward with it the next step will be to receive reverse mortgage counseling from a HUD/FHA approved counseling company. Please contact us at www.debthelper.com or call us at 800-920-2262 when you are ready to schedule your counseling.
How Long: Counseling generally lasts about 60 minutes and you can expect to be scheduled within 72 hours of contact DebtHelper.com. Emergency and after-hours appointments are available.
3. Payoff is Ordered: The Payoff is a document from any lender that you currently owe and it will show the amount that you still owe on the home. This amount will have to be paid off with the proceeds from your reverse mortgage before you will receive any funds from it directly.
How Long: This is ordered from a title company and usually the loan officer receives it within 24 – 48 hours.
4. Appraisal Ordered: Your loan officer will generally assist you in scheduling an appraisal for your home. This is another step that is required by HUD/FHA which means that the appraiser must be one that is approved by HUD/FHA; your lender will know which appraisers are approved. An appraisal will determine the market value of your home, and whether any repairs will be required to meet the FHA guidelines.
How Long: Depending on how busy the appraiser’s are you may be able to schedule an appraisal within 3 to 7 days. The appraisal takes about 2 hours.
5. Inspection Ordered: Frequently, an inspection of your home will be required to ensure that the home is structurally sound and to detect whether there has been any extensive termite or dry rot damage to your house.
How Long: If necessary, an inspection will be scheduled within 3 to 7 days and generally takes around 2 hours.
6. Insurance Ordered (if applicable): If your home is not presently insured it will be required that you get insurance for the home which will mean you have to get a four point inspection and then get the insurance. If you already have homeowner’s insurance however, you will not have to worry about this step.
How Long: If necessary you will contact an insurance provider and decide on a policy with an agent that’s right for you. This depends on you and could take a few hours or a few days
7. Application Sent to Underwriting: Once the appraisal and inspection are complete the processing procedures begin, just as they would for any other type of loan. Underwriting is the fist step of this; this is when your loan application is sent in for approval by the lender and they ensure that it meets all of the HUD/FHA guidelines for a Reverse Mortgage.
How Long: Underwriting is a relatively lengthy process generally taking up to 2 weeks. This can vary however, depending upon the volume of loans being considered for approval at any given time.
8. Closing: Unless you are doing a Reverse Mortgage for purchase, which means you are using the proceeds from your Reverse Mortgage towards the purchase of a new home, this is the second to last step. At the closing your three day right of rescission begins, meaning that you will have only three more days from closing to decide not to go through with the loan.
How Long: The actual closing is a very short matter that generally lasts less than an hour and can be scheduled after the loan has been approved and the 3 day right of rescission has passed.
9. Disbursement: The final step after closing. Disbursement occurs when the three day right of rescission has expired. This means that you will now receive your funds from the loan in the manner that you have chosen, and your loan is complete