It takes about 30 to 45 days to finalize a reverse mortgage and upon the signing of the final documents, it usually takes three days to receive your payment.
A reverse mortgage is a loan based on the equity in a home. It is different than a home equity loan in that there are no income requirements or credit checks needed. This is a fairly new loan that has gained popularity in the United States. It allows seniors who are 62 and older to convert the equity that has been paid into their home into cash. The money from a reverse mortgage can be used for many different reasons, including home repair, medical bills and supplemental income.
Payments of a reverse mortgages can be received in four different ways:
1. Monthly for as long as you live in the home. The total amount will be determined based on the applicant’s life expectancy and some other factors.
2. Monthly for a predetermined number of years that the applicant may choose.
3. One up front lump sum for part or for the entire amount.
4. Line of credit to be drawn out whenever it is needed in part or in full.
The applicant is allowed to choose a combination of these plans and can change the plan any time during the loan.
Completing the entire application
The time frame from filing out the application to the closing will all depend on how long it takes for the borrower to provide documentation as well as outside reports and an underwriter’s approval. The file has to be 100% completed with all required documents and have any conditions stated by the underwriter cleared. This will normally take between 30 and 60 days, however quicker approval can be worked out if an emergency situation is present.
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