One of the requirements of getting a reverse mortgage is that the borrower must attend reverse mortgage counseling with an objective adviser. This is required by the United States Department of Housing and Urban Development (HUD). Counseling is an important step in the reverse mortgage process because it ensures all parties that the borrower knows all of his or her financial options before deciding on a reverse mortgage. While a few states require that counseling is done face to face, most states allow counseling to be done over the phone. Here is what you can expect throughout your reverse mortgage counseling experience.
Before your counseling session, you must first fill out a mortgage application. After your licensed expert reviews your application, he or she will provide you with a list of HUD-approved counselors. You simply choose the counselor and set up the counseling appointment. Setting up the appointment is easy and requires a simple phone call. If you have any questions about making an appointment, your licensed expert can explain the process and answer any questions you may have.
There are a few important things to remember. Most of the time, counseling is done on the phone, but there are some states that require counseling sessions to be done in person. Make sure you check what your state requires. Also, it is important to keep in mind that your counseling session should not be biased. That is why counseling is performed by a third party.
Your counseling session will take about an hour. During your session, the counselor must review your financial options, list possible consequences of a reverse mortgage, and explain the impact a reverse mortgage may have on you and your heirs. You’ll also learn even more about reverse mortgages and about the reverse mortgage process. Much of the information you’ll hear at counseling will be the same information your licensed expert has already gone over with you.
During your counseling session, the counselor will also talk to you about your finances and financial needs. This helps the counselor determine if a reverse mortgage is right for you or if there is a more appropriate solution for your situation.
Again, remember that your counseling session should be unbiased. Your counselor cannot direct you toward any solution, product, or lender. They are there to inform you of your options and make sure you are given enough information on reverse mortgages to make an educated decision on whether the program is right for you.
Once you complete counseling, you can decide what option is best for you. If you decide to continue on in the reverse mortgage process, you will need to send your completed counseling certificate to your licensed expert. Upon receipt of the certificate, your licensed expert will then guide you through the next step in the reverse mortgage process.
You can learn more about counseling in our informational guide and DVD. If you have any questions about counseling or reverse mortgages in general, please feel free to call one of our licensed reverse mortgage experts.