The Process

Reverse Mortgage Process in California

So, you've decided a reverse mortgage might just be a home financing option you'd like to pursue. Often times, once a homeowner decides they want to do a reverse mortgage, the logical next question is, "what is the process from here?". We'll walk you through the reverse mortgage process in California. Let's dive in!

By the way, if you'd rather watch a quick video, you can also watch the video (it's at the bottom of the page).

Steps to Getting a Reverse Mortgage in California

  1. REVERSE MORTGAGE EDUCATION

Educate yourself by contacting a California Licensed reverse mortgage broker. This is sort of the discovery process. You'll learn how a reverse mortgage works, how much you can borrow at your age, the basic qualifications, and more.

  1. REVERSE MORTGAGE COUNSELING

Reverse Mortgage loans are insured by HUD / FHA. One of their mandated safeguards is that you do reverse mortgage counseling session. It's nothing too daunting, but they just want to make sure that you understand the program and loan responsibilities. Loan officers earn a living by doing loans. Of course they want you to do a reverse mortgage. The counselor is meant to be a neutral 3rd party that doesn't care if you do a reverse loan or not.

Again, the counselor's job is to be a second form of education to ensure you understand the basics. They'll remind you that you still own the home and that it's just a loan, like any other (but with no required monthly payment). They'll remind you that it's meant to be on your primary residence only, so if you move out permanently, the loan becomes due. Also, since you still own the home and are in no way selling it or relinquishing rights, you can still leave it to your kids and much more.

  1. REVERSE MORTGAGE WAITING PERIOD

Your reverse mortgage broker cannot order the FHA case number or appraisal until one week after you do your counseling. This is how California is unique versus other states in the union.

  1. APPLICATION | SUBMIT LOAN STIPS TO YOUR REVERSE MORTGAGE BROKER

Normally, when you decide a reverse loan works for you, your California licensed mortgage broker or lender will give you a needs list and take a reverse mortgage application. The application does not HAVE to be done in any particular order (meaning before counseling vs after counseling), but many places won't do it until you've done counseling. The goal is to get your paper trail and application to your loan officer before the end of the California required 1 week waiting period. That way, your reverse mortgage can get completed in a timely manner.

  1. Processing Your California Reverse Mortgage Application

Now that the waiting period is behind us, your team (loan officer and processor) can order the FHA case number, appraisal, and title. Not much for you to do at this point. It's your team that's doing the behind the scenes processing etc..

  1. Underwriting

Normally, the team can have everything ready by the time your appraisal comes back (depends on the turn times to get title and appraisal of course). So, when the appraisal comes back, normally your team can then submit your loan to underwriting.

  1. Conditional Approval

Typically, your loan will get a conditional approval within 1-2 days or 2-4 days depending on volume with the lender or investor. There are normally conditions that need to be met. Your loan officer may ask you for some additional items. Your team may have some additional items to gather that don't directly impact you. Once the team has those conditions, they'd submit them back to underwriting in hopes of getting a "CTC" or "Clear to Close". This just means the loan if fully approved.

  1. Reverse Mortgage Signing / Funding

You're basically done. Now you can sign your loan documents and then after a three business day waiting period (aka, rescission period), the lender can fund your loan. If you have a mortgage now, it will get paid off then any other funds that need to be disbursed gets done by the title / escrow company.

How Long Does the Reverse Mortgage Process Take in California?

Every file is different, but it normally takes 4-7 weeks in California. Some can go quicker and some can go slower. It depends on volume with the lender as well as how quickly the homeowner gets items requested.

That's it in a nutshell.

To find out more about a reverse mortgage in California, give us a call at (949) 492-2252 x 704 or visit our website at https://LifeSourceMortgage.com/Reverse-Mortgage

1238 Puerta del Sol, Suite 2-E, San Clemente, CA 92673 - info@LifeSourceMortgage.com

NMLS#3211759, ID MLB# 20803211759, CA BRE# 01869699

The author of this post has an extremely comprehensive website at Reverse Mortgage Info.

Here is our YouTube Channel with plenty of Reverse Mortgage Info.

Here is Shawn's YouTube Channel called Reversed TV.