HOW DOES A
REVERSE MORTGAGE WORK?

A reverse mortgage is a powerful financial tool that allows you to turn some of the equity in your home into funds you can use as you choose. Like a traditional mortgage, a reverse mortgage is a home-secured loan; but unlike a traditional mortgage it is specifically designed for homeowners age 62 and older.

A reverse mortgage has several benefits, including a flexible repayment feature. On a monthly basis, you can pay interest only, principal and interest, or make no principal and interest payment. As with any home-secured loan, you must meet your loan obligations: keeping current with your property taxes, insurance, and maintenance. And you must live in the home as your primary residence.

To be eligible for a reverse mortgage, you must own your home, be at a least 62 years of age and have enough equity in your home.

REVERSE MORTGAGE ROADMAP

The process to obtain a reverse mortgage is simple; but it’s helpful to know what you can expect. Here’s a reverse mortgage roadmap to help you along the way.

STEP 1: PREPARATION

The road to your reverse mortgage starts with education. You may have heard a lot from friends and family or even from television about what reverse mortgages are, but it's important to weigh all the pros and cons for yourself. An experienced loan specialist like the professionals at Reverse Mortgage Funding LLC (RMF) can provide you with the information you need to help you decide if a reverse mortgage solution is the right choice for you.

STEP 2: ON THE ROAD

If you decide to move forward, you'll choose a lender and submit your application to them. The application includes some personal information, and a financial assessment will be conducted to make sure you'll be able to afford ongoing expenses like property taxes, insurance and home maintenance.

You'll meet with an independent reverse mortgage counselor who's approved by the U.S. Department of Housing and Urban Development (HUD)*, to make sure you understand all aspects of the loan.

STEP 3: ROUNDING THE BEND

Your home will be appraised by an independent appraiser, to determine the value. Then the appraisal and loan package will be sent to an underwriter for review and approval. The underwriter will make sure all the information in the package is correct, complete, and compliant with all applicable laws and regulations.

STEP 4: ALMOST THERE

After your loan application is approved, you will sign your closing documents with a title officer or attorney (depending on your state's requirements).

STEP 5: ARRIVAL

Three days after closing, the loan funds are disbursed and you can access them according to the payment plan you selected. Your loan funds will first be used to pay off any existing mortgage on your home, a new lien (the reverse mortgage) is placed on the home, and you can use the remaining funds from your reverse mortgage however you choose.

SEE WHAT YOU ARE ELIGIBLE FOR

Take the next 2 minutes and let's get started on the path to determine if you are eligible for a reverse mortgage!

Check Eligibility

DIANE S.

Benicia, CA

I just so happen to have a reverse mortgage. The best thing I ever did in my life.

JAMES J.

Philadelphia, PA

You get to stay in the house and that's a really good thing. Especially since you still own the house.¹

RICK M.

Fairport, NY

It's a mortgage, or it's a line of credit, but with flexibility. I haven't heard yet any reason why I shouldn't pick this product.

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¹As with any mortgage, borrower must meet their loan obligations, keeping current with property taxes, homeowners insurance, and maintenance.

*This material has not been reviewed, approved or issued by HUD, FHA or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD/FHA or any other government agency.

HOW DOES A REVERSE MORTGAGE WORK?