I get asked by many prospective clients how the whole process works and how long it takes. Here are the answers:
The proces starts when the client decides to move forward and the application package is generated after a five minute conversation to gather some basic information. The application package for a Reverse Mortgage is larger than some other loan packages and needs about 30 to 40 signatures. This can be signed in my office or it can be overnighted to the client to be signed at their convenience. Some paperwork is requested usually consisting of copies of ID, Insurance and existing loan information about the property.
After the package is returned to me, counseling is ordered. Counseling is done over the phone by an independent third party with the client. It takes between 20 and 45 minutes. After counseling is completed (this usually takes place within a few days after the application package was returned) the rest of the processing can start.
An appraisal and title report are ordered as well as any FHA information, if applicable. It can take one to three weeks for everything to be gathered and submitted to the lender for underwriting.
The lender usually underwrites the file within a week and sends any stipulations or conditions to the Loan Officer. These are usually easy to take care of and the loan should be cleared to close within a week to ten days of underwriting.
Once the loan is cleared, the closing gets scheduled as soon as possible. The funds are available to the borrower three business days after closing.
All in all, the process usually takes between four and six weeks. I have seen closings take place in as little as two weeks and in rare instances, the process can take longer than two months.
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