STEPS TO GETTING A REVERSE MORTGAGE

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1. AWARENESS; Homeowner learns about reverse mortgages from news article, advertisement, word-of-mouth, etc.

2. UPFRONT EDUCATION; Homeowner contacts Senior Lending Services (SLS) division at  (www.slsorg.org) or 800-710-6606 to learn more about reverse mortgages.

3. COUNSELING; Homeowner seeks counseling from a HUD-approved counseling agency, or a National counseling agency, such as AARP (866-209-8085). Counseling is required for all reverse mortgages and may be conducted face-to-face or by telephone. By law, a counselor must review (i) options other than a reverse mortgage, that are available to the prospective borrower, including housing, social services, health & financial alternatives; (ii) other home equity conversion options that are or may become available; (iii) the financial implications of entering into a reverse mortgage; (iv) the tax consequences affecting the prospective borrower's eligibility under state or federal programs and the impact on the estate or his or her heirs.

4. APPLICATION/DISCLOSURE; Homeowner fills out a loan application and selects a payment plan, whether fixed monthly payments, lump sum payment, line of credit, or a combination of these. Senior Lending Services discloses to borrower the estimated total cost of the loan, as required by the federal Truth in Lending Act. Homeowner provides SLS with required information, including verification of Social Security number,  copy of Deed to their home, information on any existing mortgages(s), and a counseling certificate.

5. PROCESSING; SLS orders a property appraisal, which the homeowner pays for, to place a value on the home. The appraiser makes sure the physical condition of the property meets FHA guidelines. If any structural defects are found, the homeowner must hire a contractor the complete the repairs after the reverse mortgage closes.

6. UNDERWRITING; After receiving all pertinent information and data, lender finalizes loan parameters with homeowner and submits loan package for final approval. It can take anywhere from 4-8 weeks (sometime sooner) to underwrite the complete package

7. CLOSING; When the loan package is approved, closing (signing) of loan is scheduled. Interest rates are calculated. Closing papers and all final figures are prepared. Closing costs are normally financed as part of the loan. Lender or title company has homeowner sigh loan papers.

8. DISBURSEMENT; Homeowner has three business days after signing papers in which to cancel the loan. Upon expiration of the period, the loan funds are disbursed. Homeowner accesses the funds in the form of payment option selected. Any existing debt on the home is paid off. A new lien is placed on the home. The homeowner may use the funds for any reason.

9. REPAYMENT; Homeowner does not make any monthly mortgage payments during the life of the loan. The loan is repaid when the homeowner ceases to occupy the home as a principal residence. The loan may be repaid by the homeowner or the heirs/estate, with or without a sale of the home. The repayment obligation can never exceed the home's value or sales price.