The Application Process for Reverse Mortgages

If you are age 62 or older and have built up some equity in your home, a reverse mortgage could be the right financial solution for you. Many homeowners choose reverse mortgages because they provide the financial flexibility to enhance their quality of life during their retirement years.

What Is a Reverse Mortgage?

A reverse mortgage lets you borrow against the equity in your home - you can make use of money you have already invested, without having to make monthly mortgage payments. What's more, because this program is backed by the Federal Housing Administration, you are guaranteed never to owe more than the value of your home when it is sold. And with a reverse mortgage you continue to own your home, as you do today.

The Application Process

Here are the steps you would go through to obtain a reverse mortgage:

  1. Consult with a reputable and experienced lender who can answer your questions about reverse mortgage options. This is often the most critical step to ensuring you find a solution that meets your needs.
  2. Arrange for a session with a non-profit housing counseling agency that is approved by the Department of Housing and Urban Development. This required step, which may be completed in-person or by telephone, lets an independent counselor review the program with you and confirm that it makes sense for your situation.
  3. Complete the application paperwork provided by your lender. This includes the loan application, and various disclosure documents.
  4. Complete loan settlement. Settlement often takes place at the borrower’s home. There is a three-day period during which you may change your mind, and then the loan funds will be disbursed.