Step by Step Guide on How to Get a Reverse Mortgage in California
A reverse mortgage can be a valuable financial option for older California homeowners who want to access their home equity without selling or moving. If you're thinking about getting a reverse mortgage in San Diego or anywhere in California, it's helpful to know all the steps and timeframe to get a reverse mortgage. On this page, we'll provide a simplified, step-by-step guide to applying for a reverse mortgage in California, so you can easily understand and navigate the process and know what to expect.
How Long Does It Take to Get a Reverse Mortgage in California?
To get a reverse mortgage takes 30 to 60 days in most cases and involves a number of steps and processes which we will map out here. Everything starts with education and we are strong advocates for empowering our clients to make the best decisions for themselves. We are here to answer all your questions as the only "silly" question is the one that isn't asked. John Correll has over 25 years experience and knows how to explain everything in an easy to understand manner. Accurate Reverse Mortgage Corp is a local San Diego Reverse Mortgage Company that serves the entire state of California.
The 7 Steps to Apply for a Reverse Mortgage in California
Here is a complete guide from the initial decision making process thru closing and funding and beyond.
Step 1 - Initial Education and Evaluation
Everything starts by taking the first step which you are already doing by browsing reverse mortgages online. While we hope you find the information on this site useful, the best way to get quality information is to request a quote. Taking a look at specific numbers based on your situation will give you an accurate insight as to what a reverse mortgage might be able to offer you. Unfortunately not everyone will qualify for a reverse mortgage as there are age, equity, credit and income requirements. But the good news is you can sort that out quickly by first obtaining a quote and then speaking with an experienced reverse mortgage specialist who knows the guidelines well.
Requesting our free info kit is easy - simply give us call or use the RECEIVE A QUOTE button. We will provide you a wealth of information including a detailed quote which includes current interest rates, side-by-side comparison of options available to you and a breakdown of fees (most of which can be rolled into the loan). There is also a ton of information on how reverse mortgages work including eligibility, benefits and things to consider. We offer the package in both digital and paper options - request yours today!
After reviewing the information its time to get your questions answered. That's where experience can really matter. I've been told hundreds of times how patient I am and how well I explain things. My goal if you work with me is to provide that level of service with you so you get each and every one of your questions is answered - before you move forward with a reverse mortgage. - John Correll, CRMP
Step 2 - Reverse Mortgage Counseling
The next step is Reverse Mortgage Counseling, which most people do over the phone - however it can be done in person. In the info kit we provide, there is a list of HUD approved counselors. The borrower calls to book an appointment with the counselor.
On the day of the counseling the counselor will discuss over the phone (or in person if you elect a face-to-face session) an overview of the reverse mortgage program. They will also discuss your finances, types of reverse mortgages and a lot of the information we covered upfront. However the goal of the counseling process is that you receive quality information from a HUD approved housing counselor without the bias of a lender who may be motivated to sell you a loan. The counselor also wants to set the borrower up for success with the reverse mortgage by making sure the borrower knows their responsibilities such as continuing to occupy the home, paying taxes and homeowners insurance bills plus maintaining the home.
The whole counseling session will normally run between 45-90 mins depending how many questions the borrower has for the counselor. Once the counseling session is complete you will receive a counseling certificate which is a necessary component to apply for the reverse mortgage.
Step 3 - Application
The next step is Application. This allows the lender to begin the application process and does not bind the borrower to close the loan - the process can still be cancelled by the borrower at any time without consequences.
The borrower signs and completes the written loan application and formally applies for the reverse mortgage. If you are local in San Diego or Southern California, we can get together in person to meet and complete it together. We also have other remote options to make it easy including sending documents to your house via FED EX or utilizing Docu-Sign technology where the borrower signs the application electronically. Docu-sign has become much more popular in recent years and really took hold during the pandemic.
A number of documents are collected at time of application. Some of the more common ones include collecting the signed counseling certificate, photo IDS, proof of income , mortgage and bank statements, proof of homeowners insurance and other documents related to borrowers trust if the home is currently in a trust.
Step 4 - Appraisal
The next step in the reverse mortgage application process is appraisal. An appraisal is a report conducted by a licensed appraiser which establishes the value of your home for the reverse mortgage lender. The appraiser schedules an appointment with the homeowners and the appraiser may take pictures, measure the square footage and examine any recent upgrades and renovations.
Occasionally a 2nd appraisal is required if the loan is flagged for a 2nd appraisal by HUD on a HECM or on a Jumbo Proprietary Reverse Mortgage if the home is valued over $2 million - a 2nd appraisal may be necessary.
Step 5 - Loan Processing and Underwriting
After the appraisal report comes back, the file is sent to underwriting along with the other reports the loan processor has collected such as title report, verifications and payoffs. The underwriter will analyze the complete loan file and evaluate the appraisal, title work and borrowers credit risk to look for problems like debt and existing liens and to make sure everything fits the program rules and guidelines. If there are any issues, the underwriter and loan officer will work with you to correct the problem. To clear loan conditions, the borrower may need to submit additional documents though most can be resolved with a simple explanation letter to resolve any issues. In extreme cases, the borrower may need to complete additional paperwork or address any appraisal issues.
Once all of the loan conditions are cleared and if the loan is approved - the underwriter issues a clear-to-close and things move on to closing.
Step 6 - Closing
If you receive approval on your loan application, then the loan officer will review the final loan approval with you including available funds. The borrower makes their final selection how much money they they want to draw at closing and how to structure the final loan funds in a lump sum, term payment for monthly disbursements or line-of-credit etc. This is confirmed with borrower so loan documents are generated the way the borrower wants.
The loan officer will assist the borrower setting up an appointment to meet with a mobile notary which the escrow company can provide. The mobile notary can come to the borrowers home to sign the final papers in borrowers home - or at another location such as the office depending on the borrowers preference. The final loan documents are signed and notarized and the loan officer is available by phone or sometimes in person for questions if any come up during the loan signing. The borrower should have their photo IDs ready for the notary and a voided check for having funds wired to their account (unless they prefer to receive a paper check at funding instead).
Step 7 - Funding
The last step is funding the reverse mortgage. California is an escrow state which means generally there is an escrow company and escrow officer involved. The escrow officer confirms all the funding conditions are met and then makes the disbursements on the loan. Mortgage payoffs are sent out to if there are liens on the home. The borrowers funds are then disbursed to them based on the instructions they gave at closing. Most borrowers choose to receive their initial funds by bank wire, though if a paper check is desired escrow can overnight a paper check to borrowers home or desired address. Escrow will send the borrower the final closing statement.
After Closing Your Reverse Mortgage - What to Expect
After your reverse mortgage closes, the borrower will start to receive a monthly statement from the loan servicing department each and every month. The statements generally start showing up in your mailbox about 45-60 days after closing. They are simply statements and not bills - as there are no required monthly mortgage payments on a reverse mortgage. (of course you do need to keep current on your property taxes, homeowners insurance and live in the home - but by this point you will know that from the education and counseling you received during the whole process.) The monthly statement will provide the borrower the contact info for customer service and the key details such as loan balance, current interest rate on the loan and available line-0f-credit etc. If you elected to take a monthly disbursement automatically generally those start the first week of the next month after closing.
Once you are a client of John Correll - You are a Client For Life!
Long after the closing, I am here for each and every one of my clients. During the loan application process, I work directly, one-on-one with my clients and don't pass them off to "the back office." I really enjoying getting to know my clients and their life stories as well. Just because your loan is closed don't feel you can't call me. Please use me as a resource anytime - even months or years later. Go ahead and reach out to me with any questions or problems you might ever have about your reverse mortgage. While I cannot access the loan file for privacy reasons after closing - I have helped many clients with issues. I have even done 3-way conference calls with the borrower and customer service if they need extra help.
For many years now, I have been sending my clients an 8 page newsletter via us reg mail every 2-3 months. The newsletter is filled with fun articles and its a great way to stay in touch. I love it when I get emails from them or they call just to say hello and check in. And the economy and real estate market are cyclical. Who knows - the reverse mortgage we setup today might be ideal to refinance in the future for more money or better terms depending on what the future brings.
In short, I am here for the long haul.
People First. Business Second.
John Correll, CRMP
Certified Reverse Mortgage Professional
(888) 603-1550 | (619) 294-9820
Serving the Reverse Mortgage Needs of the Entire State of California