The amount of equity you are allowed to access from a reverse mortgage will be solely contingent on three things:

 

1) The age of the youngest borrower

2) The value of your home

3) Current interest rates.

 

The combination of these numbers will ultimately decide how much of your home's equity you will have access to. Usually it is between 35%-55% or your home’s value (depending on your age/interest rate). Once that number is determined, any outstanding loans against the property will be paid off first, and all loan costs will be added in, and then the remaining amount will be available for you to spend as you please, or leave for future use to take advantage of the growing line of credit. *note: The FHA may not allow you to utilize all available funds for the first 12 months.

 

 

STEP 1: THE INITIAL INTERVIEW

 

A phone call usually starts the process, where I can get some preliminary information. This is also the time we set up our first meeting so I can learn more about your unique situation, your retirement goals, and your financial goals for your future. This will also allow us to talk about if a Reverse Mortgage is the right fit for you and your family. I am happy to come visit you at your home if you would like, otherwise, we have offices in Fort Collins, Greeley, and Boulder we can meet at, or even meet remotely. Please feel free to invite your family members to attend our meeting as well to make sure everyone is comfortable if we choose to move forward.

 

STEP 2: HUD COUNSELING

 

One of the many consumer protections that were put in place in 2008 is that all HECM borrowers must attend a 3rd party counseling session either in person, or on the phone. The reason for this is to make sure you as a consumer both fully understand the reverse mortgage process, as well are not being misled by unscrupulous lenders. If I have done my job correctly, most if the information you will receive in the session should echo conversations we have already had.

 

You get to choose which counselor you would like to work with. There is no standard cost to the class that is regulated, but a typical session will usually cost $0-$200 and takes about an hour. Again, I would encourage you to have your family members involved in this part of the process.

 

Click here for a list of HUD Approved Counselors (Note: this is not a fully inclusive list, and is generated based on counselors in Northern Colorado)

 

STEP 3: THE APPLICATION

 

This is usually our second meeting in the process where we will take an official application. It is also the part of the process where we will collect a bunch of financial/personal documents to verify that you do indeed qualify for the Reverse Mortgage. Unfortunately, the application packet is fairly intensive and requires the acknowledgment of many different disclosures, and regretfully, this all needs to be hand-signed. I would anticipate this taking the better part of an hour to complete. Once the application is complete, we will send it to our underwriting department for initial review.

 

Click here for a list of required documentation (not all items will be applicable to your situation)

 

STEP 4: THE APPRAISAL

 

This is one of the most important parts of the Reverse Mortgage process, as the value that is assigned to your home will one of the few determining factors to see how much money you will have access to. A 3rd party appraiser (not affiliated with our company) will be assigned to visit the property and determine what a current fair market value is. They may also determine if there are any necessary repairs that need to be completed before the FHA will sign off on the appraised value. In a rare occasion, the FHA will require a second appraisal on the property, to ensure they are assigning the correct value.

 

Please click here to visit the Preparing for the appraisal page

 

STEP 5: APPROVAL & COMPLETION

 

Once the counseling session has been completed, the application is turned in, all documentation has been collected and underwritten, and the appraisal has been finalized and approved by the FHA, then we are all set to schedule a closing time. We will work with a local title company to complete the documentation, and we will either meet at their office, or they will send a mobile notary to meet you at your house or a place of convenience. There will be a 3 day recision period, and then you will be able to start utilizing the proceeds of your loan!