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The following steps are here to help guide you and give you an idea of what to expect throughout the process of obtaining a reverse mortgage. Step 1: Education and Research. Step 2: Counseling. Step 3: Application. Step 4: Appraisal and Escrow. Step 5: Underwriting. Step 6: Closing. Step 7: Disbursement.

A home equity conversion mortgage, or HECM, also known as a reverse mortgage, must be repaid in full when you die or sell the home. The lender recovers the money advanced to you, plus interest, when the home is sold.

If the loan balance is less than the home value, your heirs can use the sale proceeds to repay the loan and keep the difference. If the balance owed on the loan is more than what the home is worth, your heirs can sell the home for at least 95 percent of the current appraised value in order to pay off the loan.

FAQ about paying back a reverse mortgage Anybody can pay off a reverse mortgage, including the borrower, their spouse, their heirs or other relatives. This is most common in scenarios where the last surviving borrower or eligible non-borrowing spouse dies, and the heirs choose to make the reverse mortgage payoff.

While requirements are typically less stringent than for traditional mortgages, lenders may still review your income, assets, and credit history to ensure you can maintain the property and pay ongoing expenses like taxes and insurance.

Taking a reverse mortgage requires multiple steps, including counseling, appraisals, closing documents, and funding. The typical reverse mortgage takes 30 to 45 days from start to close. For much of that time, the lender verifies information and prepares loan documentation.

Reverse mortgage loans typically must be repaid either when you move out of the home or when you die. However, the loan may need to be paid back sooner if the home is no longer your principal residence, you fail to pay your property taxes or homeowners insurance, or do not keep the home in good repair.

How to Apply for a Reverse Mortgage Step 1: Talk to a Reverse Mortgage Advisor. Step 2: Complete a Counseling Session. Step 3: Submit Your Application. Step 4: Order an Appraisal, Title Report, and Other Information. Step 5: Processing and Underwriting. Step 6: Close on the Loan. Step 7: Receive Your Funds.

You cannot negotiate a reverse mortgage payoff. However, an heir to a property with a reverse mortgage can pay back 95% of the home value at that time if the balance on the mortgage were to exceed the home value if they wanted to keep the property.

Generally speaking, you can usually get somewhere between 40% to 60% of your homes appraised value. And the higher your home value is, the more money you can potentially access.