Steps to getting a Reverse Mortgage

The Steps to Getting a Reverse Mortgage

1. Become Aware
You learn about reverse mortgages from a relative, friend, co-worker, news article, advertisement, word-of mouth, or by visiting www.joebartolotta.com, etc.

2. Receives Upfront Education
You contact Joe Bartolotta, Florida's Upfront Mortgage Broker or the National Reverse Mortgage Lenders Association to learn more about the advantages of reverse mortgages.

3. Counseling
You seek counseling from a local HUD-approved counseling agency, or a national counseling agency, such as AARP (800-209-8085) or the National Foundation for Credit Counseling (866-698-6322). Counseling generally takes 60 to 75 minutes and is required for all reverse mortgages. The counseling is conducted face-to-face or by telephone.
By law, a counselor must review

1. the options other than a reverse mortgage that are available to you, including housing, social services, health and financial alternatives.
2. other home equity conversion options that are or may become available to you, such as property tax deferral programs.
3. the financial implications of entering into a reverse mortgage.
4. the tax consequences affecting your eligibility under state or federal programs and the impact on the estate or your heirs.

4. Application
You fill out a loan application and selects a payment plan, the options are:

• fixed monthly payments
• lump sum payment
• line of credit
• or a combination of these.

I will then disclose to you the estimated total cost of the loan, as required by the federal Truth in Lending Act. Next, you will provide to me the verification of your Social Security number, a copy of the deed to your home, information on any existing mortgage or mortgages, and the original counseling certificate.

5. Processing
The processing is where the lenders order the appraisal, which you pay for, to place a value on the home. The appraiser makes sure the physical condition of the property meets FHA guidelines. If any structural defects are found, you must hire a contractor to complete the repairs after the reverse mortgage closes.

6. Underwriting
After receiving all pertinent information and data, the lender finalizes loan parameters with you and I. It can take anywhere from 4-8 weeks (sometimes sooner, sometimes longer) to underwrite a loan package. Once underwriting has started, the payment option you desire will need to be decided.

7. Closing Once the loan package is approved, the closing (signing) of loan is scheduled. Interest rates are calculated. Closing papers and final figures are prepared.

8.Disbursement All existing debt on the home is paid off. A new lien is placed on the home. You may use the loan proceeds for any purpose.

9. Repayment
You don't make any monthly mortgage payments during the life of the loan. The loan is repaid when the you cease 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.

Important: The repayment obligation cannot exceed the home’s value or sales price, this is why you are required to pay for mortgage insurance which is included in the closing costs. The insurance releases your heirs from any any liability above the market value/sales price of your home. If there is equity left after the loan is repaid, your heirs will receive it. It's a win win situation for you.