The reverse mortgage loan process has changed as of April 27, 2015 to become more like conventional loans. No longer will you be able to call multiple lenders and get an accurate quote based off of an estimated home value, mortgage balance, and youngest homeowner birth date. To get an accurate quote, you’ll need to be prequalified by an experienced reverse mortgage specialist. Talking to a loan officer that closes a handful of reverse mortgages per year is dangerous due to their part-time attention to a complex, dynamic business.
Gathering Information On Reverse Mortgages
The way to approach the process to first learn about a reverse mortgage loan, get an idea how it works and the different uses of one, is to contact us for a reverse mortgage information packet. We’ll send you an estimate based on the assumption that you will pass the qualification process and will not be subject to any set-aside for taxes and insurance. You can digest the information and figure out if the loan is a good fit for you.
If you decide to apply for a reverse mortgage, we’ll want to prequalify you first. The reason being, we don’t want you to spend money on the appraisal (or put down earnest money if using a reverse mortgage purchase loan) until you know that you are qualified for a certain loan amount. To prequalify you for a reverse mortgage, we’ll need to know the following data:
- Legal Name
- Date of Birth
- Marital Status
- Current Address
- Property Type
- Mortgage Balance
- Gross Monthly Income
- Annual Property Taxes
- Annual Hazard Insurance Premium
- Square Footage of Home
- Do Own Other Properties?
- Have Your Taxes & Insurance Been Paid On Time?
Credit Checks Are Required
When we have all of this information from you, we’ll pull your credit report to determine if you’ll be approved, subject to a set-aside, or declined. If your gross monthly income is borderline for approval, we’ll ask you about your assets. The qualification can be done in about 15 minutes, so it shouldn’t take that long to hear back.
As you can see, we’ll be taking your word for many of these items until we process your loan and have all of your documentation. If you have derogatory credit, we’ll need to talk to you about why the issue occurred. If there is an extenuating circumstance that caused you to have financial problems, we’ll need to know what it is, so we can see if an exception can be granted.
Working With An Experienced Broker
When you work with a reverse mortgage broker, you’ll have some advantages over going directly to a lender. Brokers are able to take your loan application to any lender they have a relationship with. An experienced broker will weigh the option of going with the lender with the best combination of rate and cost vs. one that can approve a loan with some extenuating circumstances. If your loan is declined by one lender, we can take it down the road to the next, as we know that the rules are somewhat subjective. That’s not the case when you apply directly with a lender.
The reverse mortgage loan process just became much more complex, but it doesn’t have to be felt by our customers. If you work with an experienced, educated reverse mortgage specialist, you won’t necessarily know the difference. We suggest you research the credentials of the person that you are working with. Use our request an estimate tool to get the process started today.