The Reverse Mortgage Process

What to expect, step by step.

Most people want to know what they're getting into before they begin, and that's a sensible place to be. A reverse mortgage follows a clear path from first conversation to closing, and knowing it ahead of time takes much of the uncertainty out.

1. A first conversation

We start by talking about you: what you want the years ahead to look like, and how your home and its equity might fit into that plan. Sometimes a reverse mortgage is the right tool. Sometimes another option fits better, and that's worth knowing before going any further.

2. Independent counseling

Before anyone applies, they sit down with an independent counselor. It can feel like an extra step, but it's one of the best protections built into the process. The counselor has nothing to sell. Their role is simply to make sure you understand what you're considering. Family members are welcome to join.

3. Application

If you decide to move forward, we complete the application together. It's mostly a matter of gathering a few familiar documents, like identification, income information, and your homeowners insurance, with time for questions along the way.

4. Financial assessment

The lender then looks at income, credit, and payment history. This isn't about perfection. It's about making sure property taxes, insurance, and upkeep can be comfortably kept current for years to come, because that's what keeps the home secure.

5. Appraisal

An appraiser visits the home to determine its value. That number matters, because it helps set how much equity is available, and it gives everyone an independent, objective view of what the home is worth.

6. Approval and closing

Once the loan is approved, it's signed at closing. In most cases, there's a three-day window afterward to change your mind before any funds are released. It's one more reminder that this decision is yours, made at your own pace.

Knowing the road ahead makes any trip easier.

Frequently Asked Questions

How long does the reverse mortgage process take?

About as long as most home loans. The paperwork sets the pace, so the quicker the documents come together, the quicker everything wraps up.

What happens during reverse mortgage counseling?

Before anyone takes out a reverse mortgage, they spend about an hour, usually by phone or video, with an independent counselor. The counselor explains how the loan works, what it costs, and what else might fit. It's a required step for every borrower, and a good one: a conversation with someone who has nothing riding on your decision.

Do I need an appraisal for a reverse mortgage?

Yes. An appraiser visits the home and gives an opinion of its value, and that opinion helps decide how much equity can be used. If the appraiser spots repairs, some can be taken care of after closing with loan funds, so the house doesn't have to be perfect beforehand.

The Process of Getting a HECM / Reverse Mortgage Loan

Awareness

You may have heard about the reverse mortgage loan on TV, on the radio, online, by receiving a mailer, or you did your own research.

Education

Meeting with a qualified Mortgage Loan Originator is key. This is where you learn about your specific numbers, what you might qualify for, and receive an analysis of your particular situation.

Counseling

Counseling is required from an independent third-party, HUD-approved counseling agency, for all reverse mortgage borrowers. Typically this fee is paid by the borrower. Consult with your Reverse Mortgage Loan Originator and make sure you complete this as soon as possible. Many times counseling can be completed over the telephone. You will receive two certificates; one to keep and the other to send to our office.

Action / Application

Meet with your Mortgage Loan Originator and decide if a reverse mortgage is right for you. Our reverse mortgage professionals may meet with you at our office, your home, or by phone to help guide you through the application. You will be left with a complete copy of ALL the documents for you and your trusted financial advisors (i.e. CPA or attorney) or family member(s) to review.

Financial Assessment

To help ensure the long-term success of the HECM loan over time, HUD requires a financial review of each applicant’s credit history, property tax payments and other credit factors that will be evaluated to measure a borrower’s willingness and financial capacity to meet the ongoing obligations of the loan.

The Appraisal

Upon receiving your HUD counseling certificate we will contact you to arrange for an appraisal of your property. The appraisal is paid by the borrower. Reverse mortgages use a full FHA appraisal. The value of your home is based on what comparable properties in your neighborhood have sold for recently.

Processing

The lender will begin to process your paperwork. This process includes the appraisal, title report, and checking the balance of any liens/mortgages to be paid. Also, verification of income and other credit factors are gathered at this time. We will be in contact regularly during this time.

Underwriting

When the processing and all paperwork is complete, we forward your file to the loan underwriter to determine if the loan will be approved and will work to satisfy any conditions/requirements needed to close the loan.

Closing & Funds Disbursed

If your loan has been approved by underwriting we will contact you to arrange for the signing of your final loan documents. At this time we will confirm your payment plan or partial lump sum (how you want to receive your money). Once you’ve signed the closing documents you have three business days to cancel the loan if you should choose to do so. After the cancellation (rescission) period has passed, your funds are distributed based on the payment option you chose at closing. HECM for Purchase loans do not have a rescission period.  See HECM for Purchase Guidelines for more information.