This is the second article in HSH.com's reverse mortgage guide. Within Part I, readers will find easily-digestible information on reverse mortgages, discover how to qualify for these loans and review potential alternatives.
How do I get a reverse mortgage?
Once borrowers understand how reverse mortgages are defined and are clear on eligibility requirements (see our first article: Reverse mortgage overview and eligibility) it may be helpful to learn how to obtain a reverse mortgage.
Getting a Home Equity Conversion Mortgage (HECM) or reverse mortgage involves many of the same steps as in obtaining a first mortgage, but there are some unique aspects to the process.
7 steps to getting a reverse mortgage
- Meet with HUD-approved counselor. This advisor works with you to ensure you understand HECMs (or reverse mortgages) and how one might work in your situation. HUD offers a look-up tool to find local counselors.
- Locate a lender that offers the type of mortgage you want; the Department of Housing and Urban Development (HUD) provides a research tool that facilitates finding an authorized HECM lender in your area. Or, simply review the list of lender partners on this page to locate a HECM or reverse mortgage lender.
- Complete an application, providing documentation that is required for any mortgage.
- Establish property value. Your lender will arrange for an appraisal.
- Complete property repairs, as necessary. Reverse mortgages must generally be repaired to meet HUD's standards.
- Undergo a financial assessment. Depending upon your financial situation, some aspects of your loan's management may vary.
- Close the loan. Depending on your loan choices and how your finances stack up, you may or may receive any proceeds.
According to the National Reverse Mortgage Lenders Association, "Lenders are strictly prohibited from assisting a senior in scheduling counseling; borrowers are not to be pressured in any way and must contact a counseling agency at their own pace."
The financial assessment and lots more are covered in the "Reverse mortgage / HECMs and your finances" section of this guide.
Intrigued? Want to better understand how reverse mortgages work? Read the next article in this guide.
Next: How reverse mortgages work
Previous: Reverse mortgage overview and eligibility
- HSH.com on the latest move by the Federal Reserve
The Federal Reserve concluded a meeting today, leaving the federal funds rate unchanged at a range of 2.25% to 2.5%, but continued to express patience and flexibility in its current approach to monetary policy.
- Can SCRA Help You Avoid Foreclosure?
If you're in the military, the Servicemembers Civil Relief Act provides certain protections when it comes to mortgage and housing-related challenges. Here's how the SCRA can help.
- Is Buying a Home a Good Long-Term Investment?
Few would-be homeowners would argue that a great return on their investment is important when it comes to buying a home. Here are a few things that can help bring long-term value to your next home purchase.
- How to Get a Discounted Home -- Compliments of the Federal Government
Whether you're a first-time home buyer or just looking for a good deal, here's how to get a bargain home offered by the federal government.
- How Much House Can You Afford? More Than You Think, Says Study
How much house can I afford? That's a common question for many first-time homebuyers. And the answer, according to these researchers, is "more than you think."