Many senior home owners have already received many reverse mortgage offers which might have made them wary of the program instead of explaining the reverse mortgage process lucidly. The best way to learn about the reverse mortgage process is to understand how these reverse mortgage companies actually work.

Talk to the Company

Once a firm is chosen from the top reverse mortgage companies in a city it is time to talk to the representatives of the establishment to understand how the process works. It is normal for the reverse mortgage counselors to gather vital information such as contact details, existing loans, home value and more. The professional will also try to explore why the client needs reverse mortgage, advising against it if it is not required. At this point, the adviser will also offer information on the fees involved and the amount of money that can be made available. A quote in writing will also be sent to the client that mentions the total annual loan cost.

Go through the Counseling Session

Clients interested in reverse mortgage will need to go through a counseling session conducted by a third party counselor. The cost of such a session is usually in the range of $125 to $150 and the client has to pay the fee at the time of the session. In case of financial hardships, the counselor should be notified of the client's inability to pay for counseling. The session can also be done over the phone. It is the counselor’s job to explain the pros and cons of reverse mortgage to the client. The sessions will include a systematic review of the various aspects of reverse mortgage and alternatives that may be available.

Lender Formalities

After receiving the counseling certificate, the lender will initiate certain formalities which will include an appraisal of the property, title report and opening and escrow. In the mean time, the home owner will need to fill out a formal application in person or over the phone. A good reverse mortgage company will have professionals who will help with this. The next stage is where the application will be sent to the homeowner for signing. It is imperative to note that just because you have submitted a signed application you are obligated to do the reverse mortgage.

Provide Vital Details

Along with the application, a list of necessary documents will also be sent to the home owner. The documents that will have to be furnished at this point include the mortgage statement (if applicable), a photo ID, social security number, copy of the power of attorney and of your trust (both only if applicable), copy of the home insurance declaration page and more. Once these documents have been received by the lender, the loan will be submitted to underwriting. The underwriter will determine if any additional documents are required to sanction the loan and the home owner will be notified if need be.

If everything is in order, the applicant will receive a phone call from the reverse mortgage company about how the loan proceeds. One final document will have to be signed at this point. After a final review and a 3 day rescission, the loan amount will be disbursed as requested.