All About The Reverse Mortgage Process
Are you prepared to apply for a reverse mortgage? If you are all set to cash in the equity of your home, then there are a few things that you have to know and accomplish.
You need to conduct a thorough assessment of your lifestyle and research about reverse mortgages. Even though you might be prepared mentally, to convert the property value of your home, you will never know if there are other things you don’t know yet. Search for a list of reverse mortgage lenders and take note of their conditions and rates so that you could compare these agencies. Free reverse mortgage guidelines and kids could also be found online. Once you’ve done enough researching and reading, look for an independent third party expert from the HUD list. They perform a private counselling in person or through the phone. This is particularly useful when you have come across terms that you don’t understand. Apart from that, in case you have heard myths regarding reverse mortgage, they could easily tell you if it is true or not.
When all of your doubts have been settled, the next thing you can do is fill out a form from your preferred lender and select the type of reverse mortgage payment. You could get payment through a lump sum, tenure, modified tenure, term, and modified term. Your past session with your financial counselor has most likely provided you with the important information about the needed payment options.
Your selected lender will work on your application and this means fully investigating and appraising your house. They will figure out the value of your home according to its status and location. Once done, the lender will then finalize the parameters of the loan and turn over the full package for the required underwriting.
If your loan has been underwritten and then approved successfully, they would come up with a computation of the initial interest rates as well as closing expenses. You will then be provided with the loan contract that indicates the final figures as well as the closing papers. When the contract has been closed, you will be given three business days to cancel the said loan. In case you decide to do so for some reason, you should cancel it in writing or else, the disbursement will start with the process on its fourth business day.
In case you have existing loans that are placed on your home, the lender will arrange to cover the needed payments. It’s crucial that you’re obligation is only with the reverse mortgage as long as it is still in effect. Given that, your existing debts will be paid off before the loan money is given to you. The rest of the funds would be part of your credit line or your monthly amortization regardless of how small or big the excess is. There are cases when the current loan repayments have already taken up the full mortgage fund. Once this happens, the reverse mortgage will remain in effect however, you will not get any other payments.
Once the existing debts have been paid off, your reverse mortgage amortization will start and you will get the payment base on your preferred payment option Your reverse mortgage loan will expire if the borrower dies, the house is put out in the market, or the home is no longer your primary residence.
Reverse Mortgage Specialist
Myrtle Beach, SC