Reverse Mortgage Counseling
To meet eligibility requirements for a reverse mortgage, the US Department of Housing and Urban Development (HUD) requires that interested individuals meet with an HUD approved counselor. After the reverse mortgage counseling session, you will receive a certificate which your loan originator will require before beginning the reverse mortgage loan process.
Reverse mortgage counseling is an unbiased and confidential informational session with a third party counselor. The counseling session is intended to protect consumers and help the borrower understand the unique characteristics of the loan. This meeting takes place without the loan originator or the lender. The task of the reverse mortgage counselor is simply to review the loan with the borrower.
Scheduling Your Counseling Session
It is up to you to schedule a reverse mortgage counseling appointment. While some may pay the $125 counseling fee up-front at the time of the appointment, under certain circumstances you may be able to include the fee as part of the loan.
Information about reverse mortgage counselors will be provided to you by your loan originator. According to the HUD, one counselor must be within driving distance, four counselors must be in your home state, and five are referral agencies.
Although many borrowers choose to conduct this counseling appointment by phone, it is also possible and advisable to attend a face to face appointment with the reverse mortgage counselor.
What to Expect
Expect your counseling session to take 45 minutes to an hour. Topics you will discuss include good faith estimates, your loan comparison sheet and the amortization schedule. Counselors are also required by the HUD to inquire about your financial situation, including questions about your budget and income. When the counseling session is almost over, expect your counselor to ask you at least 10 questions about how reverse mortgages work. At this time, the counselor will decide whether you sufficiently understand reverse mortgages or not, and may choose to withhold the counseling certificate.
Who Can Attend
It is acceptable and practical to include family members, such as your son or daughter, in the reverse mortgage counseling session.
Almost all borrowers report that their reverse mortgage counseling session is a good experience that leaves them feeling informed and confident about their decision making process. In the complex world of modern finance, reverse mortgage counseling is an important service that allows consumers to make smart choices about their money.
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