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How to Apply for a Reverse Mortgage

Applying for a reverse mortgage can be a complex process. That’s why one of our goals at Mutual of Omaha Mortgage is to make the reverse mortgage application process as painless as possible. If you are interested in moving forward with a Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage loan, here is an overview of what you can expect.  

Step 1: Talk to a Reverse Mortgage Advisor 

The first thing we recommend doing if you are ready to apply for a reverse mortgage is to talk to one of our reverse mortgage loan advisors. They will review your specific situation and give you an estimate of what you may expect to receive from a reverse mortgage.  

In addition, they will be able to answer any questions or concerns you may have to ensure that a reverse mortgage is the right option for you. Your reverse mortgage advisor will walk you through exactly what you can expect and will be your personal resource as you go through this process.  

Step 2: Complete a Counseling Session 

Once you complete your free financial review with your reverse mortgage advisor you will need to complete a counseling session with a third-party counselor approved by the U.S. Department of Housing and Urban Development (HUD). This will need to be completed before you apply for a reverse mortgage. Your reverse mortgage advisor cannot make this appointment for you, but they can give you a list of counselors you can contact to set up an appointment.  

The purpose of the counseling session is to educate qualified homeowners about the features of a reverse mortgage, who a reverse mortgage is appropriate for, and go over other financial options. The counseling session can be completed in person or over the phone. It typically takes about an hour and half to complete.  

Once completed, you will receive a certificate that you will present to your reverse mortgage loan advisor.  

Step 3: Submit Your Application 

As soon as your reverse mortgage loan advisor receives the certificate of completion from your counseling session, your application may be submitted. Your advisor will help you get the application and any documentation organized for submission.  

Your reverse mortgage loan advisor may also request necessary documentation which may be needed to process your loan. This may include items such as a photo identification, a copy of your homeowner’s insurance policy, and your most recent property tax bill.  

The sooner you can get all the required documentation submitted, the sooner you will be able to close on your loan.  

Step 4: Order an Appraisal, Title Report and Other Information 

Once your application is submitted, Mutual of Omaha Mortgage will order an appraisal of your home. The purpose of the appraisal is to assess the condition of the home and establish the market value. This will help the lender determine how much you may borrow. This may take one to two weeks to complete.  

In addition, the lender will order a title report and a credit report. The purpose of the title report is to check for any tax liens on the property. If there is a lien on the property, this is a factor that can slow down the approval process. There is no credit score requirement to obtain a reverse mortgage, but the credit report will allow the lender to get a picture of your overall financial health.  

Step 5: Processing and Underwriting 

The application and all documentation will then be sent to underwriting to be reviewed and processed. While the underwriting process for a traditional mortgage is typically automated, underwriting for a reverse mortgage is a manual process.  

The underwriter will verify that you meet all the reverse mortgage requirements and that you have submitted all the necessary documentation for approval. The underwriter will either approve, approve with conditions, or deny. If you are approved with conditions, this will typically mean that there’s additional documentation that needs to be submitted or a home repair that needs to be done before the loan can be finalized.  

Your reverse mortgage loan advisor will reach out to you if there is any additional documentation or repairs that need to be done.  

Step 6: Closing 

Once the application and documentation have been processed, a closing date will be scheduled. The closing documents can be signed with the help of a notary, closing agent, or lawyer. This can be done at home, at the office, or another location. 

Step 7: Receive Your Funds 

There is a waiting period that lasts for three business days before you can start receiving your funds. Once that period is over, you will start to receive your funds. You may receive your funds as a lump sum, monthly payments, a line of credit or a combination of the three. You will choose how you want to receive your funds during the application process.  

If you still have a mortgage or other lien on your home, the reverse mortgage will also pay off those loans.  

How Long is the Reverse Mortgage Process 

The reverse mortgage process can take up to 45 days from when you submit your application. However, your reverse mortgage loan advisor will do everything he or she can to expedite the process.  

If you’re ready to move forward with a reverse mortgage, learn more by grabbing our free reverse mortgage guide or find a reverse mortgage loan officer here.  

Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

Get Your Free Reverse Mortgage Guide Here!