Frequently Asked Questions

Reverse Mortgage Pro

How does the reverse mortgage process work?

Education

We have all seen ads on TV or have received a mailer about the reverse mortgage program.  After all the program has been available for the past 25 years, however a 60 sec ad or marketing letter in the mail leaves a lot detailed analysis with all your questions and concerns addressed to insure a reverse mortgage is right for you.

Financial Assessment

This is a step done by phone with your loan provider before meeting them. By providing some basic application information, they will be able to tell you, before moving forward, what you should qualify for. This also helps ensure the long-term success of the reverse mortgage program over time.  HUD requires your lender to do a review of each applicant’s credit, income, tax and homeowners insurance payment history for the past two years to evaluate a used to pay future real estate tax and insurance payments.

Counseling

Counseling is a very important part of the process, it is required to be done by an independent third-party, HUD-approved counseling agency.  The counselor will explain the program options, do a financial review with you, and answer your questions.  Basically the same things your mortgage professional will do. This way you are hearing and learning about the program from two independent sources, which should give you peace of mind to better understand the program and feel comfortable that everything has been explained correctly. They have a small fee which is paid by the borrower, but in most cases it can be included in the loan closing. Your reverse mortgage professional will provide you a list of counseling agencies that you can choose from. Many times counseling can be completed over the telephone. You will receive two certificates; your lender can not begin processing the paperwork until you have provided one of your signed certificates to them which gives them permission to proceed with your loan.

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Buyers and real estate agents have agreed to buy and sell by holding hands to rent or buy a house after the documents have been signed within the office.

Application

You may meet your trusted reverse mortgage loan provider before or after counseling to complete your application paperwork. Unlike many other companies, we have zero upfront, out of pocket fees. We have local reverse experts in North Carolina and Virginia that offer, no cost, no obligation home appointments for the convenience of our clients. Your loan officer will help you decide if the reverse is right for you and if so, which program option best suits your needs.

You will be left with a complete copy of all the application documents for you and anyone you wish to share them with. If you wish to have a family member at your appointment, we encourage it as the more folks learn about this great financial planning tool for seniors, the better. Reverse Mortgage loans give you the peace of mind of a government FHA-insured loan where your Home Equity is available for you to use under a payment optional plan, so you can never risk losing it because you were not able to make a mortgage payment.

Appraisal

Once you have provided us your HUD counseling certificate, we will order your FHA appraisal. The value will be determined by this 30 page report which will be based on the condition of your house along with what 3 to 5 comparable properties in your area have recently sold for. Once again, unlike most other companies, we do not require you to advance the cost of this service as it can be included in the closing of your loan or you can pay after it’s done if you decide not to move forward after it’s done.

Processing & Underwriting

We will assign a processor in our office to prepare your file to go to the HUD approved underwriter for final approval. This will include getting your appraisal, title report, getting mortgage/lien payoffs, verifying income and credit items. We will be in contact with you during this process. Once the FHA underwriter has approved your file we will contact you to advise the final numbers based on the actual value and your loan approval.

Closing and Disbursing Your Funds

We will contact you to arrange for the closing agent to is it with you to review the final loan documents. After you have signed the closing documents, you will have three days to review them before the mortgage is finalized. Once the 3 day period has gone by, your funds are wired to pay off any mortgages/liens and depending on your plan, deposited into your bank account.

When you are ready to start, the whole process will take between 30 and 45 days.

What can I expect to learn from my housing counseling appointment?

Accredited housing counselors work with seniors to help them evaluate the viability of a reverse mortgage loan by looking at the borrower’s:

  • Current budget
  • Monthly income
  • Loan risks
  • Loan benefits
  • Interest rates
  • Associated fees

HUD-approved HECM housing counselors are required to use loan comparison and analysis software that meets the requirements established by the AARP. Certified counselors must also adhere to the AARP Foundation Reverse Mortgage Education Project counseling policies and procedures. Because it is their job to help insure that you are making a responsible financial decision, they may also review financial options with you.

The AARP Foundation Reverse Mortgage Education Project regulates a national network of HUD-approved HECM housing counseling agencies by administering the exam that certifies counselors for HUD-approved HECM housing counseling agencies. HUD’s National HECM Counseling Network consists of the exam’s highest scoring counselors. That means that that you can be sure that they are charged with looking out for your best interest.

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How do I avoid Reverse Mortgage fraud and scams?

Talk to your counselor. Start by scheduling an appointment with a HUD-approved reverse mortgage counselor. It is their job to help you understand reverse mortgages and help you evaluate your situation. So don’t pay for information that should be free.

Look closely at the terms and conditions. Watch out for unethical terms and extraneous fees. Your HUD-approved counselor can help you look for these. Don’t be afraid to ask. And if you are concerned that a lender may be violating the law, report them to your reverse mortgage counselor.

You have 3 days to change your mind. Typically, you have three business days after closing on the loan to back out — for any reason.