Get Professional Help: HECM Reverse Mortgage Counseling

Why Is Counseling a Requirement For a HUD Reverse Mortgage?

The HECM or Home Equity Conversion Mortgage is the most common reverse mortgage. HECMs are reverse mortgages insured by HUD, and their fees are regulated by HUD. HECM reverse mortgages are sophisticated lending instruments, and HUD requires borrowers to meet with a counselor as a means of consumer protection. The intention of the counseling is to insure that borrowers fully understand the consequences of using an HECM reverse mortgage.

What To Do Before Seeing a Counselor

• Make sure you are eligible. You cannot apply for a reverse mortgage unless the youngest borrower is at least 62 years old. You must own the home free and clear or have only a small mortgage balance. You must occupy the house as your primary residence. The home must be a single family residence or a 1-4 unit dwelling. If the home is a condo or manufactured, HUD approval will be required.
• Use a reverse mortgage loan calculator. It is important to know if you can get enough equity from the home to meet your needs. Consider if the amount of money you are eligible for is worth the fees and interest expense related to loan.
• Consider all the alternatives that may be available. Talk to friends and family and try to brainstorm all of the possible ways to meet your needs. HECMs can be an expensive way to get money if you don't stay in your home for many years, but they can be cheaper than incurring the costs associated with selling a home.

How To Find a HUD-approved Counselor

HUD maintains a list of approved counselors at its Website. You can find counselors in your area by clicking on your state and following the prompts. If for some reason you are not able to meet the counselor face to face, telephone counseling is usually available. If you are unable to afford a counselor, you may qualify to have the standard fee waived.