1. Reverse Mortgage Borrower Education
2. Make application
3. Application is processed
4. Underwriting
5. Closing
6. Funding


1. The reverse mortgage is not for everyone. The Reverse Mortgage is the only national program to the 62 yr-old homeowner, or older, that provides access to part of the home equity without a monthly payment and the money is tax-free (check with your tax adviser).

If you want some equity out of your home and can afford to make the monthly payments, this program is not for you. If you want to access part of the equity in your home (it must be your primary residence, you must live there 183 days out of the year) and you don’t want to make monthly payments… this program is for you. Your loan officer should educate you so that you can make the best decision. Before any lender can order any services you need to have counseling, to make sure you’re not getting into something you don’t understand. You will be issued a certificate which your lender will need to begin processing your application. Let your loan officer give you a full education.

2. Your application can be done before you have your counseling, in fact it’s a good idea so that you can lock in for one-hundred and twenty days (120) the amount of money you were shown by the loan officer, or more, if the interest rate goes down at closing you get the lower rate. (The lower the rate, the more you will get). Not all reverse mortgage programs have this lock-in feature. You will also be made aware of anything that will impair the processing of your application. Your property needs to qualify, especially if you own a condominium, a manufactured home, if your home is on more than five acres, if you have a well or septic system, if your property description is metes and bounds, etc. A good loan officer on your side is where you want to be.

3. A loan officer teamed up with a great processor is really important to the processing of your reverse mortgage application to successfully overcome the pitfalls when they happen.

4. Underwriting is where the “i’s” are dotted and the “t’s” are crossed. Very rarely is there a file without conditions when it comes out of underwriting; they need to be cleared before your reverse mortgage can be closed. Another important reason to have a great loan officer on your side.

5. The closing is where you sign the final documents, your initial application was part of the preliminary paperwork, you may notice the papers at closing look very similar to what you signed in the beginning, that’s because they are…. The closing documents contain all the legal stuff to make sure you’re getting what you applied for; it’s for everyone’s protection.

6. Following a federally mandated three-day-right of rescission, which is the three days after you sign your final closing documents, your loan will be funded and you will receive the distribution option you have requested. Your money will come to you in the form of a cashiers check or electronically deposited into the checking or savings account of your choice. If you select a credit line, you can access your account anytime and as many times as you wish, with no extra fees. All distributions become part of your reverse mortgage balance. You never make a payment on your reverse mortgage; you are only expected to pay your property taxes, hazard insurance and naturally, maintain your home.

The majority of reverse mortgages are insured by FHA (FHA is an insurer and not a lender). The FHA program is the most popular because the FHA insurance is what makes this program win-win for the borrower and for the lender because it removes the risk and liability, which means the lender is willing to lend whatever amount FHA will insure. It is a totally non-recourse loan, which means that the balance can never exceed the property value. Here are the differences.

H.E.C.M. = Home Equity Conversion Mortgage… this is what the Federal Housing Administration (FHA) calls their Reverse Mortgage… almost all reverse mortgages are funded this way, because they have the lowest fixed interest rate or variable interest rate of all Reverse Mortgage programs. Homes in the Jumbo Category are more favorable in a non-FHA program; these programs are for homes whose values exceed the FHA lending limits and are available in a fixed interest rate or variable interest rate. Generally, when you receive a calculation from a loan officer it will contain at least three programs with the program offering the most money in the first column. The loan officers that we refer will provide this service.

Jumbo Reverse Mortgage: You may want to consider this non-FHA program if your home value exceeds the FHA lending limit. This program is available with a fixed interest rate, which offers more than the one with a variable interest rate. Not all lenders, at this time, offer a fixed interest rate on a jumbo reverse mortgage; we know the ones that do.

We look forward to the opportunity of being of service to you by referring a loan officer to you, in any of the 50 states.

Call us at: (877) FHA HECM
(877) 342-4326

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