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 and hopefully we are able to connect with each other!
EDUCATION AND VIDEO
Meeting with a qualified mortgage loan originator is key. This is where you learn about your specific numbers, what you qualify for, and receive an analysis of your particular situation. One thing that sets me apart is that once I get an idea of your individual scenario, I make customized video for your situation and email mail to you. That way you can forward it and share it with your relatives and financial people so they can educate themselves and understand how a reverse mortgage may be of benefit. The video is complete with an explanation on what a reverse mortgage is and isn’t, how each step of the process works, a comparison of a few different loan options, and easy to read amortization tables. I am very thorough and transparent when presenting the information. I also do follow up videos to explain the paperwork that arrives in the mail and is associated with the reverse mortage loan, so you can review the papers and watch the video at your leisure. For those who are tech savvy we can have the preliminary digitally signed and when possible, I do show up to your final loan closing to help answer any questions.
Loan Proposal
After viewing the video, you would select which loan option most interests you. We than can either drop in the mail or email a Loan Proposal to you to view highlighting that specific loan option. Nothing binds you to the lender or the loan we are highlighting as of yet, we are still at the gathering information stage of the loan. You can always change your mind on the loan type or cancel the entire process if you like at no cost at this stage of the process. Once you sign the Loan Proposal papers, we can move to the next step of the process which would be Borrower Counseling.
COUNSELING
Counseling is required from an independent third-party, HUD-approved counseling agency, for all reverse mortgage borrowers. This fee is paid by the borrower, it cannot be paid by the lender by law. I will make sure you are prepared for the phone counseling appointment which typically takes 60 minutes. Counseling is a great thing. The counselor gets access to a handful of my documents that I send you and goes over them with you to make sure you understand the reverse mortgage process. There is no pass or fail with this counseling, but if the borrower doesn’t understand the process, the loan may not go forward. This has never happened with any of my clients, with the videos I send and phone conversations, you will be fine. After counseling you will receive two completion certificates in the mail. One needs to go to me so I can send to the lender showing you completed the counseling. In California, an additional seven days after counseling must pass, called a “cool off” period, before I can take and take and submit a loan application to a lender for review. The Loan Originator is not allowed to be on the Counseling phone call. However, your relatives and financial representatives can be on the call with you if you like.
ACTION / APPLICATION AND FINANCIAL ASSESSMENT
After the seven day “cool off” expires, we than can complete a reverse mortgage loan application either in person, over the phone, or over the internet using Zoom face to face conferencing. and decide if a reverse mortgage is right for you. By this time, you have an idea of which reverse mortgage loan you are interested due to the video(s) I’ve sent you. Reverse mortgages now have a financial assessment process that needs to be fulfilled prior turning in the loan application to the lender. In this process, during the loan application interview if you have been willingly late during the past few years of your property tax installments and homeowner’s insurance. If so, we may have to collect a certain number of years of property taxes and/or insurance and roll that dollar amount into the loan to ensure you are not late paying those items. If you have paid your property taxes and insurance on time, then no funds are collected, you can pay them on your own. After obtaining your gross monthly income figures we subtract any credit related minimum payments, utility payments, monthly property tax and insurance what is left is called residual income. As long as you meet the residual income amount, you are income qualified for the reverse mortgage, subject to an underwriter validating the income provided with documentation that needs to match. The amount of residual income required varies by individual varies by state and county and how many people reside in your home.
APPRAISAL
Upon receiving your HUD counseling certificate, we will contact you to arrange for an appraisal of your property after the loan application has been completed. 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. In some cases, two appraisals may be required by the lender.
PROCESSING
We will begin to process your paperwork after receiving your loan application and preliminary signed loan proposal documentation. 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, I will contact you to arrange for the signing of your final loan documents and again if I’m within three hours driving distance, I will also be present at your loan signing to be there to help with any additional explanations if needed. 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 does not have a rescission period. See HECM for Purchase Guideline for more information.
Best,
KW