Reverse Mortgage Program and Application Process

The application for a new reverse mortgage loan generally takes about 30-45 days from beginning to end.

1. Counseling

A lender cannot begin processing a reverse mortgage loan application until the homeowner has completed the Housing and Urban Development (HUD) required counseling  and submitted a signed Home Equity Conversion Mortgage (HECM) Counseling Certificate. Counseling is available by phone from national agencies or face-face and by phone with regional agencies.

2. Application

The application legally authorizes the lender to begin the application process but the lender cannot incur any costs on your behalf until counseling is completed. The application is not binding and can be canceled at any point during the process.

3. Appraisal

The appraisal determines the current market value of the home. A reverse mortgage loan appraisal must be conducted by a Federal Housing Administration (FHA) approved appraiser and must comply with FHA guidelines.

4. Underwriting

The Underwriter reviews all of the documentation and identifies conditions to be satisfied prior to closing related to any additional or missing items. Once the conditions have been completed, the final closing date can be set.

5. Closing

On the closing date, a notary or attorney meets with the applicant to sign the final closing documents. The homeowner should check to make sure that the interest rates, fees, and proceeds have not changed.

After signing, the homeowner has a three business day “right of rescission” period in which the applicant can still cancel the application without penalty.  Following the right of rescission period, the title company will issue a check or wire the funds to the borrower’s account.