Consumer Counseling Services

As part of the reverse mortgage application process, you will be required to participate in a brief consumer education session with a HUD‑approved counselor – typically, conducted by phone and is at no cost to you.

The counselor will explain the legal and financial obligations of the program as well as any alternatives you may have. A reverse mortgage is not for everyone, so this step will help you ensure you are making the right decision.

After the session has been completed, you will be given a Certificate of Borrower Counseling, which is valid for 180 days after the session. You must then present this certificate to us as proof that you have completed the FHA-approved counseling session.

Illustration and Disclosure

Call me to schedule a face-to-face appointment to review your eligibility, address your questions, and sign all applicable disclosures. The disclosures, required by FHA/HUD will include a good faith estimate of your costs and the loan terms and benefits. This step can happen either before or after your couseling.

Also, during this step, you will be required to provide a photo identification and verification of your social security number.

Appraisal and Processing

During this step, we will do all the things necessary behind the scenes to prepare your loan for delivery to the underwriters including ordering an appraisal of your home. Other processing steps include ordering title, checking your credit for any outstanding liens, providing proof of homeowner’s insurance, etc.

A Federal Housing Authority (FHA) appraisal is required of your property to ensure your home meets HUD guidelines.

This step can not happen without counseling first being performed.

Underwriting

We will work together with you and the lender to fill any additional conditions and finalize the loan for approval.

Closing and Disbursement

Upon final approval from the lender, I will contact you to coordinate an agreeable time to sign your closing documents. Most of my closings are done in the borrower's home. Closings must be coordinated with many parties that may include: the lender, yourself, spouses, your attorney, and the title company representative.

Also, during this step, we will finalize the payment option you prefer. After signing your closing documents you will have three (3) days in which to cancel the mortgage should you change your mind.

Disbursement happens after the three day right-to-cancel period has expired and all disbursements, including those scheduled to you, will be made by the closing attorney.

After the closing and disbursement of your reverse mortgage (post-closing) you have responsibilities similar to those associated with a traditional mortgage.

You are expected to:

• Pay your property taxes
• Keep adequate property insurance up‑to‑date
• Maintain the home

Effect on Public Benefits

As currently constituted loan proceeds from a reverse mortgage are not considered income and will not affect Social Security or Medicare benefits.

However, your monthly reverse mortgage proceeds may affect your eligibility for needs based programs such as Medicaid or Supplement Security Income (SSI). You should consult with your attorney or financial advisor regarding the affect on these needs based programs.

Repayment

During the life of the loan, as long as you occupy your home as your principal residence the loan does not become due nor are there any mortgage payments.

Reverse Mortgages are non-recourse loans, which essentially means that you or your heirs can never owe more than what you could sell your home for.

The loan may be repaid by the homeowner or the heirs/estate, with or without a sale of the home.

The only requirement is that the loan be repaid in one payment. There is no requirement that the property be sold – only that the loan is repaid.

Repayment of the loan can be made via a refinancing of the home, sale of the home, or from other personal savings or assets.