Reverse Mortgage ProcessThe entire reverse mortgage process generally takes about 4-6 weeks from the initial application to the closing. The most time consuming part of the entire reverse mortgage process starts prior to the initial application, which is the decision that leads up to the initial application with a lender.
- Initial Application
The first step after contacting a HECM lender is when the lender takes your application and informs you about fees, rates and the entire process. Nothing is charged to the borrower at this point.
- Reverse Mortgage Counseling
After the application has been completed, all senior borrowers are required to take a reverse mortgage counseling session prior to anything being charged to the borrower. The borrower must obtain a signed HECM Counseling Certificate. This step is sometimes completed prior to the initial application.
A licensed appraiser will determine the market value of the property based on specific FHA guidelines.
The lender verifies ownership of the property with a title search and title insurance. The lender will clear up any issues with existing liens, name on the property or other issues that may be a roadblock for a reverse mortgage loan to close. Additionally, the lender will finish the actual underwriting and approve the application to prepare the mortgage for closing.
The final step in which the borrower and lender signs documents finalizing the reverse mortgage. This step will allow the borrower to review final amounts, rates and fees that is apart of the reverse mortgage. After the documents are signed, the borrower is given a 3 business day period of "right of recission" in which the borrower can change their minds about the loan. After this period ends, funds are sent to the borrower, finalizing the reverse mortgage.