Process Overview

  • The overall process for a Home Equity Conversion Mortgage (“HECM”) is not unlike any other mortgage loan you may have applied for. There is less emphasis on the amount of your income, and probably more importance on the appraised value of your home.
  • The first thing you need to decide is if you are comfortable doing the process over the phone, or you believe you will need someone to call on you and help you “face-to-face.” Many people today, for both security and convenience, are willing to go through the process by phone, the internet or express mail.
  • The process looks like this:
    1. Call your lender and discuss if it looks like you have sufficient equity in your home and enough income to meet the property charges of taxes and insurance. Many lenders have calculators you can use, but they will want to gather your personal information. If you wish to see how much of a loan you might qualify for, go to the HECM Wizard and you can get a good idea without having to discuss with a salesperson or disclose your personal contact information.
    2. Complete the initial application. A lender can send this by mail and review with you, or if necessary visit you and help you complete if it looks like you might qualify.
    3. Obtain Counseling. This is usually done after you complete the initial application. Though I recommend you get Counseling before you contact a lender. Too many Counseling firms rely on referrals from lenders to assure you that you get the independent advice you deserve.
    4. Complete the Appraisal and Inspection. An FHA approved appraiser will come to your home to complete this and you are required to pay them at that time.
    5. Get the Underwriting Approval or Conditions. Gather up all the income supporting documents, send to the lender and hopefully they will complete a satisfactory Financial Assessment on your HECM qualification, and sign off on the appraised value of your home.
    6. Complete the Closing. Once approved, if a Traditional HECM, or HECM to HECM refinance, a settlement agent or their notary will come to your home and you will sign the documents. If a HECM for Purchase, closings are usually conducted at a real estate or legal office.
    7. Determine the Disbursement. You will be asked how much you initially want to draw at closing. This money, in a non-purchase transaction, will be sent to you once the 3-day rescission period is past. HECM for Purchase closings will disburse the money at the closing.
    8. Make Repayments or request additional Draws. At closing you will be advised how to request money, or make repayments or how to contact your loan servicer subsequent to the loan closing.

Would you like to learn more?

  • Click here for eBrochures, eBooks, FAQs and Videos!
  • If you would like to know how much you potentially qualify for, and whether you possibly have adequate monthly cash flow, go to the HECM WIZARD and input your information.
  • If you would like to reach out and talk with me, fill out the information on Contact Me or email at st.john.bannon@JMCapGroup.com