A reverse mortgage application should be a simple, easily understood process. In most cases, closing a reverse mortgage or a reverse mortgage line of credit takes between 30 and 45 days on average. A reverse mortgage for purchase takes longer, as you have the added complexity of purchasing your new home. The amount of time it takes to close a reverse mortgage is completely dependent on each person’s individual situation.
As the borrower, you can speed up the application process with a little advance planning. For instance, the application cannot proceed until you meet with a third-party counselor, who will help you determine if a reverse mortgage is right for you. Planning for this and making a timely counseling appointment will help prevent delays in the application process.
Like a traditional mortgage, a reverse mortgage application requires a fair amount of documentation and paperwork. The lender may need copies of existing mortgages, bank statements, and deeds, and cannot proceed with the application until you deliver the documents.
You’ve been through the traditional mortgage process before, and in many ways, the required documents for a reverse mortgage can be similar. Early in the application process, ask your lender what types of documentation you’ll need to provide, gather the paperwork, and keep it handy for when the lender needs it. A delay in sending documents can drag out the application process by weeks, so a little forward planning can really speed things up.
Like any major loan request, a reverse mortgage may produce unexpected requests for supporting paperwork. For instance, the lender may request evidence that repair work suggested by the appraiser has been completed prior to closing. You can’t always foresee these requests, but staying in communication with your lender helps prevent delays.
The Actual Closing
The actual closing of an approved reverse mortgage is not a long process. After you sign the closing documents, a three-day waiting period happens. If, during this waiting period, you decide not to proceed with the loan, you may cancel the loan with no penalty. This must be done within the three day waiting period to avoid penalty. After the three days, if you choose to proceed with the loan, the loan is disbursed.