Reverse Mortgage Application Process

Everyone benefits from extra cash, especially homeowners in their retirement years. While options for generating additional retirement income were once extremely limited, reverse mortgages use home equity to give today's older adults greater financial flexibility.

How Long Does It Take to Get a Reverse Mortgage?

Getting a reverse mortgage takes 30 to 45 days and requires a seven-step application process. However, it's best to take your time deciding if a reverse mortgage is the right option for you.

Key Takeaway for Reverse Mortgages

• While homeowners do not need to meet a certain standard for their credit score to qualify for a reverse mortgage, the institution you choose will need to evaluate your financial status to ensure you are up to date on any federal debt.
• You can complete the reverse mortgage program in as little as a month. If you live in a remote area, you may experience delays due to hurricanes and other natural disasters.
• A reverse mortgage loan is an excellent way to use your home equity when you need additional cash.

The 7 Steps to Apply for a Reverse Mortgage

After going through the decision-making process, your next move is to complete the following steps:

1. Initial Application

The initial application details all fees, interest rates and loan proceeds the application includes. Completing your initial application enables the lender to begin the reverse mortgage process as soon as you finish counseling. Remember, you can cancel the application at any time without consequences.

2. Reverse Mortgage Counseling

Once you submit your application, your next step is to enter a counseling session with a federally insured counseling agency to decide if a reverse mortgage is the right option. During your counseling appointment, you and your counselor will discuss the benefits and potential drawbacks of a reverse mortgage as well as alternate options.

3. Counseling Certification

If you continue with the reverse mortgage process, you meet with a notary to sign a certification of counseling and any primary paperwork. The initial paperwork can include documentation of income, assets, credit history and any additional liens.

4. Appraisal

You may need to have your home appraised after you submit your supporting documentation, counseling certificate and signed application. During the appraisal, the appraiser may take pictures, measure the square footage and examine any recent upgrades and renovations.

To accurately separate renovations from general maintenance, the appraiser may enter your home and examine every room. Upgrades such as a renovated kitchen will generally result in a higher evaluation value. Other improvements, such as a roof replacement, are general maintenance and do not add value to the property.

5. Underwriting

Once the underwriter receives the official report from the appraisal, they will analyze your credit risk to look for problems like debt and existing liens. If there are any issues, the underwriter will work with you to correct the problem. Typically, the borrower can submit an explanation letter to resolve any issues. In extreme cases, the borrower may need to complete additional paperwork.

6. Closing

If you receive approval for your loan application, you will schedule a date for closing with an attorney or title agent. You sign the final documents at the closing to become an official reverse mortgage borrower.

7. Funding

The final step of the reverse mortgage process is funding, where you authorize the loan application. Your attorney or closing agent can come directly to your home or another location to examine the paperwork once more before closing. After authorizing the application, schedule a closing document signing with a lawyer or title agent.

You can also choose whether to accept your money as monthly payments, a lump sum or credit.

Apply for a Reverse Mortgage Today

At Senior Lending Corporation, we are proud to be an essential part of the retirement journey for homeowners. Whether you need assistance with an initial consultation or closing, our expert team will provide personalized and prompt service to meet your needs. Call us at 800-822-1190 or complete our online contact form to see if you qualify today!