After receiving all pertinent information and data, lender finalizes loan parameters with consumer (i.e., determining payment option, frequency of loan interest rate adjustments) and submits loan package to underwriting department for final approval.

7. CLOSING

If the loan package is approved, closing (signing) of loan is scheduled. Initial and expected interest rates are calculated. Closing papers and final figures are prepared. Closing costs are normally financed as part of the loan. Lender or title company has consumer sign loan papers.

8. DISBURSEMENT

Borrower has three business days after signing papers in which to cancel the loan. Upon expiration of this period, the loan funds are disbursed. Borrower accesses the funds in the form of the payment option selected. Any existing debt on the home is paid off. A new lien is placed on the home. The borrower may use the loan proceeds for any purpose. The interest rate

charged on the loan generally is adjusted
periodically (i.e., monthly or yearly). During the life of loan, the loan servicer disburses monthly payments to the borrower (if this option is chosen), advances line of credit funds to the borrower upon request, collects any repayments by the borrower on the line of credit, and sends periodic statements to the borrower.

9. REPAYMENT

Consumer doesn't make any monthly mortgage payments to lender during the life of the loan. The reverse mortgage becomes fully repayable upon: the death of the borrower or last co-borrower; the sale of the home by the borrower; a permanent move from the home by the borrower (i.e., to a nursing home), or another event after which the home is no longer the borrower's principal residence.

The loan may be repaid by the borrower or borrower's heirs/estate, with or without a sale of the home. The repayment obligation can't exceed the home's value or sales price.