- Understanding Reverse Mortgage
A Home equity loan that creates cash liquidity for homeowners who are 62 years of age or older
The simplest way to explain a reverse mortgage is that reverse mortgage is a home equity loan that creates cash liquidity for homeowners who are 62 years of age or older, and it does not need to be repaid until the borrower moves, sells the house, or passes away.
Reverse mortgage in California loan amount is calculated by a formula based on the home’s value, the borrower’s age, and current market interest rates.
2 Attend Reverse Mortgage Counseling
To ensure that you have a full understanding of the reverse mortgage loan processes
The borrower of a reverse mortgage is required to complete a loan counselling session. In most cases, this must be by a third party independent agency and generally, a list of appropriate agencies is provided. The borrower sets up the counselling and completes the session. This can be scheduled online. A packet of preparatory materials is supplied for the borrower.
The purpose of loan counselling is to ensure that the borrower has a full understanding of the reverse mortgage loan processes, benefits, requirements and potential disadvantages. It helps in determining the circumstances of the client’s situation along with the established financial needs. It also explains the features of the reverse mortgage along with all tax and other financial implications of the reverse mortgage.
3 Processing, Closing and Receiving Fundstent Goes Here
Fill out the reverse mortgage application, and provide copies of required documents.
The borrower has 3 business days after signing the papers to cancel the loan. Upon expiration of this period, the loan funds are disbursed. The homeowner accesses the funds in the form of the payment option selected.
As a borrower, you have the right to change your payment plan at any time. You simply request a new Payment Plan Agreement form from your Servicer. Once the agreement is executed, the new payment plan will go into effect the first business day of the next month.