How Long Does a Reverse Mortgage Process Take?

How long does a reverse mortgage process take?

The Home Equity Conversion Mortgage (HECM) aka “reverse mortgage” process is dependent on the lender or the borrower completing required documentation in a timely manner and varies on a case-by-case basis. However, most reverse mortgages are processed within 30-60 days, or less.

As complicated as the process may seem, with education and a diligent broker, you are able to move your reverse mortgage process almost seamlessly.

Here is a step-by-step process on what you can expect to happen with your reverse mortgage process.

1. Reverse Mortgage counseling.

All borrowers must attend a Housing and Urban Development (HUD) mandated reverse mortgage counseling session prior to their loan application being completed. The reverse mortgage counselor will help the borrower understand the reverse mortgage process, explain other financial options available to the borrower and will answer any questions they might have about the reverse mortgage process.

2. Application

Seniors, aged 62 years and older, are able to apply for a reverse mortgage and are required to complete the reverse mortgage loan application. If you have not already contacted a reverse mortgage specialist, now is the time to do so. You can speak with an advisor at 1-888-808-8486 or visit the NRMLA website to find out how you can begin the reverse mortgage process.

3. Appraisal

The lender will order an appraisal to be done on your property by an FHA approved appraiser. The appraisal helps the lender determine your property’s market value, which is used to establish the amount of reverse mortgage proceeds you will receive (your age will also be factor in determining the amount of reverse mortgage funds). Once the appraisal is complete, the loan will move to the underwriting process where all necessary documents and information will be reviewed for approval.

4. Closing

Once the loan is approved, the borrowers are able to choose from four different loan disbursement options.

• Lump sum
• Monthly payments
• Credit line
• Combination of the three

Once you have received your payout, you are an official reverse mortgage loan holder and you are able to use the funds in whatever way best suits your lifestyle.

5. Disbursement

After the loan has been approved and the borrower(s) have decided how they will receive the proceeds, the loan documents will be created by the lender. After the documents are signed,  the borrower has up to three days to decide whether or not they would like to cancel the loan. After the three day grace period, the borrower(s) can receive their funds.

6. Repayment

Unlike other regular mortgages, borrowers are not required to pay the loan back during their lifetime, as long as they live in the property as their permanent residence and maintain their obligations to the lender. The borrowers must keep up with maintenance of the residence and pay property taxes and insurance. Once the last borrower leaves the home permanently, the loan can be repaid, refinanced or the home may be given back to the lender to satisfy the loan.

If you are interested in learning more about the reverse mortgage process, you can speak with an advisor at 1-888-808-8486.

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About the Author:

I have been working in the reverse mortgage industry for 20-plus years. My goal is to provide consumers the most up-to-date and relevant information about the reverse mortgage industry and how it can affect them.

Thanks for reading!

-Alan F.

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