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Borrow against the equity in your home while you live in it.
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Reverse mortgages are designed for an older audience who are often on fixed incomes and involves what is usually everyone’s most valuable asset—their home.
A counseling session can take place either face-to-face or by telephone. We will provide you a list of counselors. Loan originators are not permitted to direct you to a specific counselor or agency. Counselors have been trained to deliver the required information either way. The session should generally last 90 minutes but can take longer as needed. You can invite any family or advisors you want.See Suggested Documents
Application, Fees, and Disclosure
We will conduct a financial assessment to ensure you have the financial stability to continue paying your property taxes, homeowners insurance, homeowners association dues, and other property charges.
We will then analyze all income sources – including pensions, Social Security, IRAs and 401(k) plans – as well as your credit history. We will look closely at how much money is left over after paying typical living expenses and decide whether to set funds aside to pay for future tax and insurance payments. If we determine that you won't be able to keep up with property taxes and hazard insurance payments, we are authorized to set aside a certain amount of funds from your loan to pay future charges. The amount set-aside will be based on the life expectancy of the youngest member.
Loan Processing and Underwriting
This determines the market value of the home. However, the final value is not established until our underwriters review the appraisal and approve it.
After receiving all pertinent information from the homeowner and obtaining other required items, the loan package is submitted to our underwriters for final approval. It generally takes anywhere from 1-5 days to underwrite a loan. Underwriting involves verifying all information and making sure the loan complies with all laws and regulations.
Once your loan has been approved, a closing (or signing) is scheduled with a title agent or attorney (depending on the state). We will confirm the payment plan with you, plus any requested cash lump sum agreed upon. Closing documents and final figures are prepared.
Disbursement of Funds
You can receive the money all at once as a lump sum, in fixed monthly payments – either for a set term or for as long as you live in the home – as a line of credit, or as a combination of these.
Life of Loan Issues
A loan “Servicer“ manages the account and is responsible for disbursing payments to the homeowner and sending periodic statements. The Servicer also monitors the account to make sure real estate taxes are paid, insurance is maintained and the member continues to live in the property.
Settling the Loan Account
The loan is repaid when the homeowner or last surviving spouse on title ceases to occupy the home as a principal residence. No debt will be left to the heirs and if the loan balance is less than the market value of the home, the additional equity is retained by the homeowner/heirs (if the home is sold). All reverse mortgage members must be at least 62.
- Adjustable Rate Mortgage (ARM)
- A mortgage in which the interest rate is adjusted periodically based on a pre-selected index. It is also sometimes referred to as the renegotiable-rate mortgage, variable-rate mortgage, or Canadian-rollover mortgage.
- Adjustment Interval
- On an adjustable-rate mortgage, it is the time between changes in the interest rate and/or monthly payment — typically one, three or five years, depending on the index.
- Annual Percentage Rate (APR)
- An interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage because it takes into account points and other credit costs. The APR allows homebuyers to compare different types of mortgages based on the annual cost for each loan.