Reverse Mortgage Process and Payment Options

Below is the most common process for getting a Reverse Mortgage. Our Reverse Mortgage professionals are eager to help you understand the Reverse Mortgage process and the various program payment options. Please contact us with any questions.

Step 1 - Research Reverse Mortgages
Speak with a mortgage professional about the Reverse Mortgage Program options. Familiarize yourself with the various types of Reverse Mortgages and work with one of our Loan Officers to tailor the correct program with available funding options that makes the most sense for you.

Here are the HECM Reverse Mortgage Programs avaliable with different funding options:

  • Standard Fixed Rate - Funding options: Payoff mandatory items at closing and receive Cash Out up to a designated percentage of your eligibility.
  • ARM-Adjustible Rate - Funding opitons.  Does not have to be fully funded at closing. Payoff mandatory items, like an existing mortgage, then determine your distribution method in the form of Cash Out / Term Payment / Monthly Annuity / Open Ended Credit Line. The ARM does not have a one year delay for Annuity-like funding options, but your internal rate can adjust with the market on this program. If and when real rates normalize, this program may subject your home equity to additional interest rate costs above the available fixed rate program options.
  • CAPPED ARM-Adjustible Rate (NEW) - This new program provides all the flexibility and funding features of the standard arm but offers more protective interest rate caps that will limit adjustments in rates that can adversely affect your home equity as rates normalize. The maximum annual and lifetime rate caps applied to this program do not affect your benefit limits, but they do serve to protect your equity in a rising rate enviornment more so then the features of the standard arm. You loan officer can elaborate on the mechanics of this program in greater detail.
  • HECM for Purchase.  The convenience of a new Reverse Mortgage with one closing to purchase a new primary residence. Down payment and some income qualification metrics may apply based on retention of former primary residence, your age, and the value of the new home.
  • HECM to HECM Reverse Mortgage Refinance.  This entails refinancing a Reverse Mortgage with a new Reverse Mortgage when certain circumstances dictate this option as beneficial to the homeowner.

Program selection is key with a HECM Reverse Mortgage.  To maximize the benefit of a Reverse Mortgage for you, it is important to match the program and properly tailor its funding features to your financial needs and goals.  This is how you win long term with a HECM Reverse Mortgage.  To start, use our Reverse Mortgage Calculator to get an estimate of how much you might qualify for based on the age of youngest borrower and estimated home value.

Step 2 - Meet with a HUD approved counselor
In order to receive a Reverse Mortgage and before you can submit an application, you must meet with an HUD approved counselor and receive a certificate of completion for counseling.  The counselor will help you understand what it means to have a Reverse Mortgage, and by design, will provide you independent guidance at their descretion as to how a Reverse Mortgage may or may not be a good fit for you. Our team will provide you a list of HUD Approved Couselors and help find a counselor in your area.

Step 3 - Fill out our Reverse Mortgage Application
After you have received a certificate of completion from the counseling agency and have determined which program best suits your needs, you are then ready to fill out our Reverse Mortgage application by clicking here. Your information will be securely transmitted to our server.  Your Loan Officer will review your application and turn it over to our processing team.

Step 4 - Your application is processed and your home is appraised
Once your file is turned over to the processing team your Loan Officer will monitor the progress and follow up with you as needed to keep you informed. While your application is being processed, a licensed appraiser will determine the value of your home and if there are any required repairs.  The need for repairs is not uncommon.  A Reverse Mortgage commitment will allow for up to 15% of your home value, within your eligibility limit, as a "set aside" for any required repairs.

Step 5 - Your loan reaches Underwriting
The underwriting process determines your final eligibilty for a Reverse Mortgage.  All details on the basis of eligible borrowers and properties are worked out in underwriting.  Any required property repairs will be outlined by the appraiser and addressed by the underwriter as part of this process.  It is customary for repairs to be escrowed from your closing proceeds so you do not have to make the repairs prior to closing. The final decision regarding any repairs and how they are handled will be made by the underwriter.  The Loan Underwriter will issue the final disposition on your loan application. Your loan may be approved, approved with conditions, or denied for a specific reason.  Your Loan Officer will stay on top of this process so we can efficiently move you to loan closing.

Step 6 - Your loan reaches the Closing Department 
Once your loan has been fully approved, your loan will enter the closing department. This is where your selected loan program and funding option, along with the terms of your loan approval, are entered into the formal loan documents in preparation for transmittal to the title company for formal closing.

Step 7 - Formal Loan Closing 

A closing appointment will then be scheduled so you can review the terms of your new Reverse Mortgage with the closing attorney and sign the paperwork. Now you have successfully completed the process of obtaining a Reverse Mortgage. After closing you’ll have three business days in which to rescind the loan if you are not completely satisfied. Once that grace period is up, you will receive the proceeds of your Reverse Mortgage based on the funding option you previously selected at the beginning of the process.  The Standard Fixed Rate option is defined at closing but the multiple funding options on the Reverse Mortgage Adjustible Rate and Flexible Fixed Hybrid programs, as outlined above in step 1, can be changed with your loan servicer at any time.  

Step 8 - Maintain and Enjoy the Comfort and Security of your new Reverse Mortgage.

Relax and enjoy the plan you have established with the addition of a Reverse Mortgage. You are not responsible for making any mortgage payments and you are still the owner of your home. Maintance requirements of a Federally Insured Reverse Mortgage are as follows.

Your Reverse Mortgage loan only becomes due under the following circumstances.

  • The death of the homeowner or subsequent death of the co-borrower on the loan.
  • The sale of home
  • You no longer occupy your home as your primary residence for a defined period of twelve consecutive months.
  • You have failed to pay the required property taxes. Note: The State of Virginia has partial and total exemptions based on age and income for property real estate taxes.
  • You fail to keep the property insured for loss.
  • You have failed to adequately maintain the property.

In summary, as you can see here in step 8, maintaining your eligiblity for a Reverse Mortgage is very basic.  It is your home and it is time for you to enjoy your retirement.  If you are 62 or older and own your home, you might be eligible for a reverse mortgage. Contact your Reverse Mortgage Specialist to discuss your scenario and learn more about the benefits of a Reverse Mortgage. We are your Reverse Mortgage Specialists, helping those in Virginia, Maryland, DC and Pennsylvania with Reverse Mortgages and leading them to a more sound and secure retirement.

 

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Jefferson Mortgage Group LLC

2536 Leeds Rd.
Oakton, Virginia 22124
703-319-2198
FAX: 703-773-6946
info@jeffersonmortgage.com
NMLS: 935554

Located in Fairfax County, Virginia. Serving all of Virginia, Maryland, DC & Pennsylvania. 

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Jefferson Mortgage Group LLC is licensed in Virginia, Maryland, DC & Pennslvania.
Virginia State Corporation Commission License Number MC-5659 and the Pennsylvania Department of Banking & Securities #46259 
The DC Department of Insurance, Securities, and Banking License #MLB935554
Maryland DLLR License #21586

An Equal Housing Lender

By refinancing the consumer's existing loan, the consumer's total finance charges may be higher over the life of the loan.

This material is not from HUD or FHA and has not been approved by HUD or any government agency.