A reverse mortgage is a good source of income for seniors. The government does not tax the funds received, and the borrower is free to use the money in the way he/she likes.

Reverse mortgages are only available to people who are 62 years or older, and the transaction must be done on the borrower's primary residence. There is no limit to how many reverse mortgages a borrower may have in their lifetime, however a borrower may only have one reverse mortgage at a time. If a borrower has a reverse mortgage, and the borrower can gain additional benefit from a new reverse mortgage, a borrower may obtain a streamline refinance of their reverse mortgage at a substantially reduced cost.

Getting a reverse mortgage involves a number of simple steps designed to assure that the lender is in full compliance and to provide the borrower with various safeguards.

A reverse mortgage is a good source of income for seniors. Here are the steps you can expect when applying for your reverse mortgage.

Education

A very important first step is to receive a through explanation of how a reverse mortgage works, and specifically how the terms of the loan will apply to you. Some of this information you can obtain from various publications, however nothing can replace a fact to face meeting with a qualified reverse mortgage advisor.

Since HUD, not the lender, regulates the interest rates, loan amounts, terms and fees, the one area for you to shop around is for the lender with the greatest level of knowledge and experience with reverse mortgages. There are many well-meaning mortgage lenders, with some understanding of the program, however selecting a lender that specializes only in reverse mortgages can make a great deal of difference in how well they can educate you and how simple they can make the rest of the process.

Counseling

Once you are satisfied that you have a good understanding of the program, and generally feel this may be a good program for you, the next step is to receive free independent counseling form a certified, HUD-approved counselor to make sure that you have had all your questions answered and that there's been no confusion. It's a protection device that the government has built into the process of obtaining a reverse mortgage.

Application/Disclosure

Once you have completed your counseling, and have confirmed that a reverse mortgage is the right decision for you, your loan advisor will meet with you to complete your application, discuss the options of how you want to receive your funds, and obtain copies of a small list of documents needed for your underwriting file.

During this meeting a good reverse mortgage advisor with go back over the critical information, and provide you with complete disclosure of all the information that applies to your transaction including rate information and a full disclosure of fees associated with your loan.

Appraisal and Title

Once your loan application is complete your lender will order an appraisal and a title search on your home. The appraiser will contact you for a convenient appointment time to view your home, and a full appraisal report will usually be provided within a few days.

Underwriting

Once the appraisal and title report are complete, the file will be sent to a HUD approved underwriter who will verify the accuracy of the information in the file, and assure that the borrower has received complete disclosure about their loan. The underwriter will underwrite the appraisal and title, request any clarification necessary, and issue a clear-to-close status on the file.

Underwriting is another step that differentiates one lender from another. A small number of reverse mortgage lenders are authorized by HUD to underwrite and close your loan "in house", while the majority of lenders would be required to ship your loan out of state to another location for underwriting. This will add time to this process, and adds some additional risk of important information in your file being misplaced or misdirected.

Closing

Once the underwriter has issued the clear to close, your loan advisor will contact you to reconfirm how you want your funds set up, and will arrange a convenient date and time for the closing. After signing the loan documents, you will have a three day right-to-cancel. On the first business following the expiration of the 3 day right to cancel the title company will disburse funds as requested and record all the documents with the county in which your property is located.

Repayment

The homeowner does not make any monthly mortgage payments to lender during the life of the loan. The loan is repaid when the homeowner ceases to occupy the home as a principal residence. The loan may be repaid by the homeowner or the heirs/estate, with or without a sale of the home. The repayment obligation can't exceed the home's value or sales price.

Reverse mortgages provide a safe secure solution for seniors to live out their life in the comfort of their own home with the peace of mind and dignity they deserve.

For more information please contact Barry Scoles, 1st Reverse Mortgage USA at 877-217-0166 or bscoles@1streversemortgageusa.com