Need a Reverse Mortgage?
From start to finish, the reverse mortgage application process usually takes 30-45 days and consists of five essential steps.
The decision-making phase that precedes the application is the most time-consuming component of the reverse mortgage loan process.
Now, the average borrower starts thinking about the process six months before submitting an application for a reverse mortgage. They then seek information from a reverse mortgage expert in their area.
The homeowner may devote one to two months to meeting with the specialist and evaluating the good faith estimate and other mortgage documentation in person.
Steps Taken to Acquire a Reverse Mortgage
The First Application:
The application gives the lender legal permission to start the application procedure. However, the lender cannot incur any expenditures on your behalf until Step 2 (counseling) is finished. The application is non-binding and can be terminated at any time.
Counseling on Reverse Mortgages:
The applicant gets counseling from a lender on the subject and signs a memorandum of understanding. Even though the application is complete, the lender is not legally allowed to expend any costs on the applicant’s behalf (such as ordering an evaluation) until the applicant has signed.
The legal worth of the applicant’s property is determined during the appraisal. This implies that even when a homeowner’s home has already been appraised, it will almost certainly need to be re-appraised at this time.
The lender will conduct a title search and get title insurance to verify the applicant’s lawful ownership of the property. They will also assist the applicant to resolve any trust concerns, unpaid liens on the title, bankruptcies, and so on. The status of the application will be updated to “clear to close” once the lender has completed underwriting and accepted it. This indicates that everything is finished and the final closing date can be determined.
A notary or attorney meets with the applicant to sign the final closing documents, which are specified between the lender and the applicant. The application enters a three-day “right of rescission” period once it is signed. This means that, even though the application has been closed, the applicant has three business days following the closing to rescind it without penalty. The paperwork will be forwarded to the closing department, which will issue the loan closing documentation.
In summary, if the reverse mortgage proceeds are available, the title firm will issue a check to the homeowner immediately following the waiting period.
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