Reverse Mortgage Application

What are the steps to apply for a reverse loan?  Is it the same as applying for a traditional mortgage or is it different?

It is just like applying for a regular loan, except the borrower won’t have to make any mortgage payments but they will still be responsible for maintaining their home, paying the property taxes, and Homeowners insurance.

The loan application is standard, but there are many lender, state, and federal disclosures to sign in the  application package.   It does require quite a few signatures and a complete copy of it is left with the applicants to save and review.

Along with the signed application, copies of bank statements, Social Security card, Drivers License, Declaration page for Homeowners insurance, Trust  ( if there is one), and any mortgage statements for the property, plus a signed HUD Counseling Certificate.

The file and documents are sent to a loan processor, Escrow is opened and a Title Policy is ordered, along with an order for an appraisal to be scheduled.

When the loan processor has all the necessary items to make the file complete, it is sent to a Lender for Underwriting.

They review it and make sure it is complete prior to giving it an approval.   Sometimes they may request a few additional items,  but nothing that is unusual.

The next step is to order the loan documents and coordinate with Escrow, assign a Notary to meet with the clients and have them sign the documents.

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The documents are returned to the Closing Department of the Lender, they review them for all signatures, communicate with Escrow to finalize closing figures and after the 3-day Right of Recession, the loan funds and closes.

The entire process takes approximately 45 days as long as the borrower has provided all of the necessary documents that are needed for the file.

Appraisals can cause a delay, or issues with the Title of the property, and sometimes the lack of cooperation from the borrower will cause the loan to take longer to complete.

Applying for a reverse loan is generally not difficult and can be completed in a reasonable amount of time.

 

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