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How the Reverse Mortgage Program Works

 

Like any other financial transaction, getting a reverse mortgage involves a number of steps designed to protect both you and the lender.

Here are the steps you can expect to go through when you apply through the Financial Freedom reverse mortgage program:

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1. Initial Discussion

The first thing we like to do is talk to you, either over the phone or in person, about whether a reverse mortgage is right for you. We talk about the pros and cons of the program, how it works, how much money you might receive and anything else you'd like to know about. Then you decide whether you can benefit from the reverse mortgage and would like to take the next step.


2. Counseling

If you decide that a reverse mortgage is the right choice, you receive independent counseling from a certified, HUD-approved counselor to make sure that you have had all your questions answered and that you understand how the program works. It's a protection device that the government has built into the process of obtaining a reverse mortgage.


3. Appraisal

Next we arrange for an appraisal to determine the objective market value of your home, and whether any repairs will be required to meet Federal Housing Administration guidelines.


4. Inspection

In some cases an inspection may be required to make sure that the home is structurally sound and that there's no extensive termite or dry rot damage. This would be requested if the appraiser had noted there was evidence of damage at time of appraisal.


5. Underwriting

After the appraisal has been completed we go through all the normal processing procedures that you might find with any mortgage. One exception is that there is no income or  credit qualifying with a reverse mortgage so the process can be a much more streamlined process.


6. Closing

The final step of the program is the closing where you receive the money, or proceeds, from your reverse mortgage. You can choose to receive the payment in one of three ways: as a lump sum, as a monthly payment or as a line of credit.

Then it's up to you: you can use your money to pay bills, fix up the house, help a family member, or just use the money to enjoy life a bit more.