At some point, many people will consider a reverse mortgage, either to help increase income, or to use funds to pay off bills, remodel the home, or take a vacation. But how do you know if you can get a reverse mortgage, and if so, how do you apply? In order to be eligible for a reverse mortgage, the homeowner who is the youngest has to be at least 62, and have sufficient equity in the home. Some of the things taken into consideration when determining whether there is enough home equity include the age of the youngest homeowner, the current interest rate, and whether the new rate will be fixed or variable.

The Application Process

Step 1. Research

The first step is to gather as much information as possible, and then contact lenders to see if a reverse mortgage is the right thing for your personal situation and needs. If necessary, enlist a trusted family member or friend to help you with this step.

Step 2. Counseling

One of the requirements of a reverse mortgage is that you obtain counseling from a HUD approved agency. This is to make sure that you fully understand all the options available to you.

Step 3. The Application

Once you have gone through the counseling process and have decided that a reverse mortgage is the right option for you, it is time to fill out the application, and decide how you want to receive payments. The payment options include

Monthly payments (either for a specific amount of time or for as long as you live in your home)

One lump sum

A credit line (payments that are unscheduled, in amounts and at times decided by the borrower until the line of credit is exhausted)

A combination of any of the three choices.

Step 4. Processing

This is typically a sit and wait step as the lender processes your application, at this time, the lender will usually order things such as credit reports, lien payoffs, title reports, and an appraisal of the home. The appraiser will decide how much the home is worth and check for any structural damage that may need to be taken care of after the loan has closed. .

Step 5. Underwriting

Once all the necessary documentation and information have been sent to the lender, they will complete the paperwork needed for the package and send the loan for final approval and underwriting.

Step 6. Closing

Once the loan is approved, a meeting will be scheduled between you, and the lender. At this point, you are given closing papers and all of the final figures to approve and sign.

Step 7. Disbursement

Once closing is completed, you will have a three-day period where you can stop the process if you change your mind. After the three days, your loan funds will be disbursed, and you will begin to receive payments according to the payment options you selected.

Step 8. Repayment

The reverse mortgage will become due if the home stops being used as a primary residence, you sell the home, or if the borrower dies. The loan can be repaid either from the sale of the home, or from refinancing.

Get to know more about California reverse mortgage. Visit us at http://www.reversemortgagedirect.net.

Get to know more about California reverse mortgage loan at http://www.reversemortgagedirect.net/needs-analysis.aspx

Author Bio: Get to know more about California reverse mortgage. Visit us at http://www.reversemortgagedirect.net.

Category: Finances
Keywords: reverse mortgage, mortgage, real estate, personal finance, seniors, loans, retirement, investing,