A Homeowner’s responsibilities when taking out a reverse mortgage should be carefully considered.
Some Tips to help you understand and evaluate your responsibilities as a homeowner, when applying for and securing a reverse mortgage, are enumerated in the following paragraphs.
Pre-Application Responsibilities of a Homeowner who is applying for a reverse mortgage.
Before being approved for a reverse mortgage, a homeowner must attend a reverse mortgage counseling session, which is facilitated by a Department of Housing and Urban Development certified reverse mortgage counselor. The homeowner is then given a Home Equity Conversion Certificate (HECM) to take to his or her mortgage lender. Usually a mortgage loan will take 30-60 days to complete. The process of attending a reverse mortgage counseling session, prior to initiating the loan process, will help to expedite the loan process itself.
After receiving a Home Equity Conversion Certificate, the borrower will then proceed to find a good mortgage lender.
It is important to shop around and find a mortgage lender who is well-established, highly recommended and reputable. It is also important to consult with a real estate attorney, financial counselor and/or tax accountant before converting the equity in your home, into a reverse mortgage. These are all responsibilities of a prudent homeowner before securing a reverse mortgage.
Responsibilities of a Homeowner during and after the reverse mortgage application process
A homeowner is responsible for supplying thorough and accurate information, both about himself and his property. He is also responsible for supplying any additional information requested by his mortgage lender, in a timely fashion. After the reverse mortgage loan has been approved and closed, the borrower is responsible for keeping the taxes and insurance current on the property. The borrower is also responsible for letting the bank know if he or she is moving out of the primary residence on a permanent basis. At this point, the loan will become due. If the homeowner dies, his heirs are responsible for letting the bank know that the homeowner has passed away and again, the loan will then become due if full.
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