A Brief Guide to Reverse Mortgage Counseling – Part-1

If you have made a plan to get a reverse mortgage, then probably you will need a reverse mortgage counselor. Such a counselor is required in most of the cases.

FAQ’s about Reverse Mortgage Counseling

Here we have given answers to some common questions about reverse mortgage counseling.

Why do I need reverse Mortgage Counseling?

For a federally insured reverse mortgage, which is also known as a home equity conversion mortgage, The US Department of Housing and Urban Development requires a certified counseling session.


It was said by Sue Hunt, who is housing counseling program manager at Consumer Credit Counseling Services that this is a very important financial decision for a senior citizen who wants to make use of the assets they have available until they die.
She further said that, they certainly don’t want to have seniors making decisions that aren’t well educated and well informed.

Does everyone need counseling?

If you are one of those borrowers of reverse mortgage who have chosen a federally insured reverse mortgage, then you definitely need to get counseling before you apply.


It was said by the president of the National Reverse Mortgage Lenders Association Mr.Peter Bell that, if you have home that is more than $625,000 worth, which is a federal limit, you may choose to apply for a reverse mortgage through a proprietary lender. If this is the case, then you may not require getting counseling, but it’s generally recommended that you get a reverse mortgage counseling.

It might be suggested by some lenders that you have a discussion with their own consultants to learn about your reverse mortgage options, but it is not identical to official counseling from an independent HUD-approved counselor who has got a certificate to work with you on your own options.

How can I find a counselor?

It is required that Reverse mortgage lenders should provide a list of 10 reverse mortgage counseling agencies to prospective borrowers. Out of which five of the agencies must be local, and at least one of them should be at a reasonable driving distance from your home. The rest of the agencies must be national intermediaries such as AARP.

If you log on to HUD’s web site you can find national counseling agencies, as well as local HUD-approved counseling agencies. You can hold a meeting with the counselors or they can also guide you on phone.

What will the session entail?

In reverse mortgage counseling, after analyzing your budget the counselors will give you information and advice.

More specifically, in that session you will discuss that what is the reason that you want a reverse mortgage. You will also review your current income, if any; your debts, you also have to provide information about existing mortgage if you have one; your monthly expenses; medical expenses; home improvements that you have planned; your current access to emergency cash and the possibility that you will move from your current residence, either into a new home or a nursing home within a few years.

You will receive a projection about the amount that you can expect to receive from a reverse mortgage, as said by Hunt. And you will compare that, which lenders and payout terms suits you the most?

Reverse mortgage counseling has to be done in a meeting or on the phone. The duration of reverse mortgage counseling will be almost an hour, or more, it depends on how many questions do you ask. If you are doing it over a phone, but in that case it may take more than one call. In North Carolina, only face to face counseling is possible.

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