Steps to expect on the path to a Reverse Mortgage
Steps To Get A Reverse Mortgage
Step 1 Choose a lender
- Shop around and compare different offers and rates and fees can vary
- Be sure they’re members of NRMLA and check credibility through the nmls consumer org site
Step 2 Reverse mortgage counseling
- Over the phone or in person approved counseling agency
- After completion you will receive your counseling certificate and can apply for a loan
Step 3 Apply for your reverse mortgage
- Complete and turn in your application to the lender you’ve chosen and they will order services like appraisals, title etc.
- After the appraisal is complete you will receive a copy of the report as well as an updated summary of your reverse mortgage terms if they’ve changed from the appraised value.
Sep 4. Loan Closing
- At this time your reverse mortgage lender will schedule a travelling notary to bring your final loan documents for signing.
- After signing the notary returns your docs to the lender for funding
- After a 3 day right of recession period, not including Sundays or Holidays, your loan funds will be ready to disburse
Step 5 Loan funding and disbursement
- The title company receives funding from the reverse mortgage lender
- Once the title officer confirms the lenders deed was recorded they can then disburse the funds by wire.
Reverse Mortgage Examples
Reverse Mortgage SCENARIO EXAMPLE #1
John Bosworth, Age 68
Home Value – $250,000
Home Equity – $210,000
Approximate Mortgage Balance – $40,000
The Challenge:
John is a widower who lives at home alone. He would like to keep his home, but is having trouble making payments and meeting expenses. His monthly mortgage payment is $611. Even with both Social Security income and pension, he is still short by $187 per month…
The Solution:
John takes out a Reverse Mortgage for $142,496. He takes a lump sum of $40,000 and applies it to his existing mortgage and the balance in monthly payments of $681. After paying the mortgage off entirely, John’s monthly income rises to $1,291. That’s $611 per month for the mortgage payment, plus another $681 from the Reverse Mortgage.
Reverse Mortgage SCENARIO EXAMPLE #2
Craig Jenkins, age 82, and Sylvia Jenkins, age 79 (Reverse Mortgages are calculated using the age of the youngest home owner.)
Home Value – $375,000
Home Equity – $375,000
The Challenge:
Craig and Sylvia both take medication to stay in good health. The cost of monthly meds and treatments makes it difficult for them to find the money needed to maintain the quality of life they once enjoyed.
The Solution:
They take out a reverse mortgage with the option of one lump sum totaling $218,419, or a monthly income of $1,495. The extra cash flow from their Reverse Mortgage more than covers their monthly cost for medication, and allows Craig and Sylvia more freedom with much less stress.