We’re happy to discuss your goals and loan options with you to determine if a reverse mortage is right for you, and which one.
Steps to Getting a Reverse Mortgage
The U.S. Dept. of Housing and Urban Development (HUD) and other agencies have prepared materials for homeowners looking for reverse mortgage counseling. We’ll provide you with a list of certified counselors who can help you decide if a reverse mortgage is right for you or your family. The session usually takes a little over an hour.
What to Expect from a HUD Counseling Session To qualify for a FHA-insured Home Equity Conversion Mortgages (HECM), you’ll have to attend a session with a licensed reverse mortgage counselor. They’ll give you information and advice based on your budget and reasons for wanting a reverse mortgage. The counselor will review income, any debts or existing mortgages, monthly expenses including medical, home improvement plans, cash flow, and other relevant factors with the borrower(s). The session can be held over the phone or in person.
Info for family members For family members acting as power of attorney or legal guardian for the homeowner, the counselor will require proof of guardianship or power of attorney before the session.
If one spouse is not on title to the property, they must also join the counseling session. This non-borrowing spouse should understand that if the borrowing spouse predeceases the owner or no longer uses the home as their primary residence, the reverse mortgage will become due. In these cases, repayment is typically made through the proceeds of the sale of the property, or through a refinance into a new mortgage.
It's a good idea for the family to sit down together and discuss their wants and needs prior to this session. Family members are welcome to join the counseling session.
After the session, the homeowner will receive the required 'Certificate of HECM Counseling', which verifies that the prospective borrower has met with a licensed counselor.
With this certificate in hand, prospective borrowers are then directed to submit a reverse mortgage application.
After the counselling session, we'll help you complete the application. It includes the following documents:
-Mortgage Statement(s) -Social Security Card or Medicaid Card -Driver’s License -Declaration Page of your Homeowner’s Insurance -The complete Trust Agreement including all pages and amendments -Proof of smoke detector and carbon monoxide (CO) detector installed in you home (please make sure one of each is installed on every floor). -Proof that your water heater is properly strapped -Power of Attorney (if applicable) -Death Certificate/Marriage License (if applicable) -Divorce Decree & Settlement Agreement (if applicable) -If you own an FHA approved condo we'll need: The Approved Condo Questionnaire, Budget and Master Policy. This can be obtained from the HOA management company, who may charge you for it.
The appraiser will make an appointment with you to come look at your home, take measurements and pictures. Two to three days after the inspection, we’ll receive a copy of the appraisal and forward it to you for your records.
Why do I need an appraisal? An appraisal is required by the Federal Housing Administration (FHA) to report your home’s value and to make sure your home is safe and structurally sound.
What is the inspection process? The inspection is a very simple walkthrough inside and outside of your home. The appraiser may test the lights, run water in the sink, or flush a toilet. They’ll take notes and draw a diagram of your home. Outside, they’ll take pictures and measure the exterior walls.
How long does it take? Only about 15 to 45 minutes.
Anything else? The appraiser also compares your home to others in your area, to determine the value of your home.
Once we have the appraisal, your loan package will be submitted to our underwriting department for approval. This takes about 3 business days, and we may have some questions for you during this part of the process. Once you loan is approved, your loan documents are prepared for your signature.
Your Commerce Home Mortgage advisor can come to your home or you can come into their office to sign everything. A licensed notary will be there as an official witness. Four business days later, your reverse mortgage will be funded. Enjoy the benefits!
Qualifying for a reverse mortgage is surprisingly easy.
The borrower(s) must be at least 62 years of age, own their own home, and live in it as their primary residence. There are no income requirements*, credit history, or health qualifications to meet. You don’t need to have the entire mortgage paid off to qualify. However, any existing mortgage or lien on the home must be paid off at the closing of the reverse mortgage. In fact, reverse mortgages are often used to pay off existing mortgages.
* The borrower is responsible for paying property charges including homeowners insurance, taxes, and maintenance of the home for the term of the loan.
Will my home qualify?
Eligible properties include Single Family Residences, Town Houses, Planned Unit Developments, and some manufactured homes. Condominiums are eligible, but they must go through an FHA approval process. Talk with of our advisors to determine how much money is available to you through a reverse mortgage.