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The process of getting a
reverse mortgage involves several phases.
Education
This is the
phase that you are at now. You are taking the time to
learn about the reverse mortgage program to determine if it
is appropriate for your situation.
Counseling
As
part of the reverse mortgage application process, it is
required that the homeowner participate in a consumer
education session with a HUD-approved counselor. The
purpose of the session is to explain the legal and financial
consequences of obtaining a reverse mortgage. This
session ensures that the borrowers understand the
obligations of the loan agreement. The participant is
provided a Certificate of Borrower Counseling which is given
to the lender as evidence of completion. The
certificate expires 180 days after the session.
Application
This is the
phase when the homeowner sits down with the lender and signs
the loan application. The lender will disclose to the
homeowner the estimated total cost of the loan, as required
by federal Truth in Lending Act.
Processing
The
paperwork phase. The lender will order an appraisal of
the home, do a title search and get a payoff value for any
outstanding mortgages. Typically, it takes between 45
and 60 days to process a loan.
Closing
The occasion
when a borrower signs loan documents, including the mortgage
or deed of trust, and when closing costs are paid.
Cash Disbursement
The
homeowner has three business days after closing in which to
cancel the loan (three-day right of rescission period).
Upon expiration of this period, the cash is then available
in the form of the payment option selected. |
