Here are three easy tips for finding and choosing a HUD counselor.
Finding a Reverse Mortgage Counselor
HUD reverse mortgages, or Home Equity Conversion Mortgages (HECM), are insured by the FHA. They are the most common type of reverse mortgage loan. Because reverse mortgages can seem somewhat complicated at first, HUD requires all borrowers who apply for an HECM to see a counselor. The counselors are trained to meet HUD standards and are experts on reverse mortgages. These counselors are available even if you apply for a different type of reverse mortgage other than an HECM. Seeing a counselor is very important regardless of whether or not it is required. Below are three tips to help you prepare for and find counseling.
1. Make sure you are eligible. The youngest borrower must be at least 62 years old. You must have enough equity in the home to make the available loan proceeds worthwhile. You must occupy the home as your primary residence and intend to occupy it for as long as you have the loan. The property must be acceptable collateral to the reverse mortgage lender. Manufactured housing only qualifies on a case-by-case basis. The house must be in good condition. Check with a reverse mortgage lender about your specific property up front, and before you spend any money on the application process.
2. Consider all of your alternatives first. Taking a reverse mortgage on your home is a financial decision. Try to put emotions aside and think in dollars and cents. Could you sell the house and buy or rent something cheaper? Could you take in a boarder for extra income? Could you rent the house and live with a relative? After you consider all of your options, if you decide to move forward with a reverse mortgage, you can expect to discuss your options when you see a reverse mortgage loan counselor. The counselors are required to make sure you have considered all of the available alternatives.
3. Use the Internet or call an advocacy group to find a counselor near you. From the HUD.gov website, you can search for Housing Counseling Agencies. If you have a relationship with an advocacy group, such as AARP, you can contact them. AARP can be reached at 800-209-8085.
Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.