How to Apply for a Reverse Mortgage

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When considering a reverse mortgage, there are several steps to take along the way, outlined by federal legislation; and no step can be skipped. In order to insure you are fully protected against possible fraud, it is important to work with a reputable lender who can offer you reverse mortgage counseling that will give you all of the information you need when applying for a reverse mortgage. Individual reverse mortgage counselors should be able to walk you through the entire process with clarity.

The first step in applying for a reverse mortgage is to gather all pertinent information. Valuable reverse mortgage counseling can be found through many nonprofit organizations. Once you have gathered all information needed to make an informed decision, and are ready to seriously consider the reverse mortgage as a financial option to your financial needs, you then need to obtain credit counseling. This reverse mortgage counseling must be provided through a federally approved vendor, such as AARP.

During your reverse mortgage counseling sessions, you can review all of your options for any viable solutions regarding your financial position. You will also find even more information about how a reverse mortgage can affect your government benefits, your taxes, as well as your estate and potential heirs. When you have completed the reverse mortgage counseling and are still sure you want to get a reverse mortgage, it is then time to submit your application.

During this step in applying for a reverse mortgage, your counselor will put you in touch with a qualified lender who will then underwrite your loan package. This can be a somewhat lengthy process, taking up to two months to complete. It is during this time that you will then decide how you want to receive your loan payments, including a lump sum, a line of credit, or monthly installments.

When closing the loan, you will establish both the interest rate and closing costs. This step will also include signing the papers. Regarding the closing costs; they are typically financed as a part of the loan but you could choose to pay them out of pocket. At this point, your application process is complete, and you will have obtained your reverse mortgage!

Remember: when receiving reverse mortgage counseling and you still decide to go forward with making the loan, should for any reason you no longer desire to live in the house or in the event of your death, you will need to repay the loan. That is most likely the one sticking point that many forget to take into consideration when considering a reverse mortgage loan. If you have clearly understood this part as well and are fine with it, then by all means take out that reverse mortgage loan and remove the financial burden from off your shoulders.