In general, a reverse mortgage application is the result of months of research, followed by another month to month and a half of applying for the loan. Here is how the process usually breaks down:
An interested senior, along with his or her loved ones, begins looking into a reverse mortgage to determine whether it is suitable. Since this is a big decision, and there is a lot to learn, the research process generally takes months to complete.
Finding a Specialist
Next, the interested homeowner will contact a Texas reverse mortgage specialist and begin speaking seriously about obtaining the loan. This can also take a few months, as there is much to go over.
A reverse mortgage application starts the process, but it is not binding. It covers the fees that the borrowers will incur, but these fees are not immediately charged. You are free to cancel your application at any time before it is finalized.
Speaking to a Counselor
As part of the HECM program, you are required to speak to a licensed housing counselor before getting a reverse mortgage. Once counseling is complete, you will receive a certificate and the lender may being to charge you for the reverse mortgage.
When you took out your original mortgage or decided to refinance, you had your house appraised as a way of determining its value. To get a reverse mortgage, you must again get an appraisal, but in this case it is slightly different, as the Federal Housing Administration specifies a certain format. In fact, homeowners who already have an appraisal are almost certain to need a new one that meets the FHA’s standards.
Underwriting and Closing the Loan
The next step is for the lender to confirm that the borrower owns the home and that there are no issues such as unpaid liens. Once this is done, the applicant sets a date to meet with a notary and sign all relevant documents. Once the application is signed, the borrower has three days to cancel, or rescind, during which he or she can do so without incurring a penalty. After these three days, the process is complete.