The Reverse Mortgage Process

Talk To A Team Member

Contact a Reverse Mortgage Expert now to find out if a reverse mortgage is right for you and if you qualify.

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At this time, we’ll work together to help you choose the best type of reverse mortgage for your needs and determine how you’d like to receive the money from your new reverse mortgage – a line of credit, lump sum, monthly payments or a combination of those. At VIP Mortgage, we work closely with Financial Advisors to help you achieve your retirement goals.

Review Financial Goals with A Professional

Because reverse mortgages are a big step for any homeowner, HUD (Department of Housing and Urban Development) requires that all applicants receive third-party counseling to explain all the available options and details. We’ll provide a list of counselors for you to contact.

View Appraisal and Inspection

An appraisal will need to be completed on your home in order to determine the market value, make sure it fits within government guidelines and check for any repairs needed to the home. You might need a structural inspection as well.

Underwriting

After we get all the documents we need from you, we’ll work behind the scenes and finalize all the details of the loan.

Close On Your Home

We’ll set everything up and come to you with all the final documents to sign. We couldn’t make closing any easier!

Loan Disbursement

As with all home loans, the right of rescission period takes three business days. Any debts you’d like included are paid and you can feel secure knowing you’ll never have to make a mortgage payment again.

Repayment Activates

For the life of the loan, you never make monthly mortgage payments to your lender. Reverse mortgages become due when the borrower(s) no longer occupies the home. If the death of the borrower occurs, the heirs/estate may repay the loan from the sale of the home or refinance the home. It’s really that easy!

Reverse Mortgage Myths

NOT TRUE – This is just a mortgage loan and you retain ownership for as long as you live. Then your estate determines its fate.

NOT TRUE – While you must have equity in your home, we can pay off the current mortgage with the reverse mortgage. This is done frequently.

NOT TRUE – When it comes time for you or your heirs to pay off your loan, it can be paid in full, refinanced or sold – it’s your choice.

NOT TRUE – We personally work with a lot of financial planners to increase financial stability in different ways. Many seniors are concerned about outliving their assets. Using their home equity will help preserve their liquid assets which is critical in our current economic environment.

NOT TRUE – These are considered loan proceeds and not income, so they do not affect your benefits. It’s TAX-FREE income.

NOT TRUE – Your heirs are entitled to all the equity in your home once the reverse mortgage is paid off.

NOT TRUE – If you live to 150, you can never be forced out of your home and no mortgage payments are ever due.

NOT TRUE – As long as you keep your property taxes and insurance current and live in the home, you can NEVER be forced out.

NOT TRUE – There are specific provisions, guaranteed by FHA, that state you can never owe more than what the house is worth.

NOT TRUE – The costs have been significantly reduced in recent years and the costs are deducted from loan proceeds. You do not pay these out of pocket.

Reverse Mortgage FAQs

HECM, the Home Equity Conversion Mortgage, for purchase allows seniors, age 62 or older, to purchase a new principal residence using loan proceeds from the reverse mortgage.

The program was designed to allow seniors to purchase a new principal residence and obtain a reverse mortgage within a single transaction and still avoid having an ongoing mortgage payment. The owner would still be responsible for property taxes, insurance and maintaining the property.

Existing one-to-four unit properties where construction has been completed and the property is habitable. See ML 2007-06.

No. The lender may only take an application once the Certificate of Occupancy, or its equivalent, has been issued.

The following property types are considered ineligible:

  • Newly constructed residence where a Certificate of Occupancy or its equivalent has not been issued by the appropriate local authority
  • Cooperative units
  • Boarding houses
  • Bed and breakfast establishments
  • Existing manufactured homes built before June 15, 1976

Yes.

No. Seller concessions are applicable to forward mortgages only.

No.

Yes.

Yes. Although one spouse will become the HECM mortgagor, the lender must obtain the credit report for a review of financial obligations, monetary judgments, and liens that could jeopardize the HECM lien status/clear and marketable title.

The senior may decide to cancel the purchase transaction at any time prior to the date of closing. If the senior decides to cancel the transaction, he/she must notify all parties in writing. Where earnest money has been provided, the senior should review the sales contract to determine if the earnest money is refundable. The Federal Reserve Board of Governors should be contacted for the right of rescission and Truth in Lending Act guidance.

The title company (settlement agent) is responsible for disbursing funds in accordance with state law.