How Does a Reverse Mortgage Work?
A reverse mortgage is a powerful financial tool that allows you to turn some of the equity in your home into funds you can use as you choose.
Ask Charles Hamilton Your Reverse Mortgage Questions
Mortgage Loan Originator - Specializing in Reverse Mortgages | NMLS #448392
Like a traditional mortgage, a reverse mortgage is a home-secured loan; but unlike a traditional mortgage it is specifically designed for homeowners age 55* and older.
A reverse mortgage has several features, including a flexible repayment. On a monthly basis, you can pay interest only, principal and interest, or make no principal and interest payment. As with any home-secured loan, you must meet your loan obligations: keeping current with your property taxes, insurance, and maintenance. And you must live in the home as your primary residence.
(*)To be eligible for a reverse mortgage, you must own your home, have enough equity in your home, and be of a certain age. Some products are available to homeowners as young as 55 and up in select states. The HECM Reverse Mortgage product is for homeowners 62 and over.
Reverse Mortgage Roadmap
The process to obtain a reverse mortgage is simple; but it’s helpful to know what you can expect. Here’s a reverse mortgage roadmap to help you along the way.
Step 1: Preparation
The road to your reverse mortgage starts with education. You may have heard a lot from friends and family or even from television about what reverse mortgages are, but it's important to weigh all the pros and cons for yourself. I can provide you with the information you need to help you decide if a reverse mortgage solution is the right choice for you.
Step 2: On the Road
You'll meet with an independent reverse mortgage counselor who's approved by the U.S. Department of Housing and Urban Development (HUD)*, to make sure you understand all aspects of the loan.
If you decide to move forward, you'll choose a lender and submit your application to them. The application includes some personal information, and a financial assessment will be conducted to make sure you'll be able to afford ongoing expenses like property taxes, insurance and home maintenance.
Step 3: Rounding the Bend
Your home will be appraised by an independent appraiser, to determine the value. Then the appraisal and loan package will be sent to an underwriter for review and approval. The underwriter will make sure all the information in the package is correct, complete, and compliant with all applicable laws and regulations.
Step 4: Almost There
If your loan application is approved, you will sign your closing documents with a title officer or attorney (depending on your state's requirements).
Step 5: Arrival
Three days after closing, the loan funds are disbursed and you can access them according to the payment plan you selected. Your loan funds will first be used to pay off any existing mortgage on your home, a new lien (the reverse mortgage) is placed on the home, and you can use the remaining funds from your reverse mortgage however you choose.
Call 916-267-4068
to find out how I can help
As your local reverse mortgage resource, I’m available to sit down with you to answer all your questions, and let you know if you’re a fit for a reverse mortgage, today.
Resources
From white papers to guides, we’ve got all the content you need to see if a reverse mortgage is right for you.
Retire Better with a Reverse Mortgage Guide
Learn what a Reverse Mortgage is, how it works, how it can be used in retirement and other important information.
Home Equity Conversion Mortgage (HECM) for Purchase
Learn how you can use a Reverse Mortgage, also called a HECM, to purchase a new home.
