Reverse Mortgage Counseling

A reverse mortgage is a special type of home loan that allows homeowners aged 62 and older to convert part of their home equity into cash without having to sell their home or make monthly mortgage payments. Unlike a traditional mortgage, with a reverse mortgage, the lender pays you.

Before obtaining a reverse mortgage, the federal government requires that you speak with a HUD-approved counselor. Our certified counselors provide the required counseling to help you understand the costs, benefits, and potential risks of reverse mortgages.

How Reverse Mortgages Work

With a reverse mortgage:

• You remain the owner of your home
• You don't make monthly mortgage payments
• You can receive funds as a lump sum, monthly payment, or line of credit
• The loan is repaid when you sell the home, move out, or pass away
• You're still responsible for property taxes, homeowners insurance, and home maintenance

The amount you can borrow depends on your age, the value of your home, current interest rates, and the specific reverse mortgage program you choose.

Types of Reverse Mortgages

There are several types of reverse mortgages:

• Home Equity Conversion Mortgage (HECM): The most common type, insured by the Federal Housing Administration (FHA)
• Proprietary Reverse Mortgages: Private loans backed by the companies that develop them, often for higher-value homes
• Single-Purpose Reverse Mortgages: Offered by some state and local government agencies and nonprofit organizations for specific purposes

Eligibility Requirements

To qualify for a reverse mortgage, you generally must:

• Be at least 62 years old
• Own your home outright or have a low mortgage balance that can be paid off with the reverse mortgage proceeds
• Live in the home as your primary residence
• Not be delinquent on any federal debt
• Have financial resources to continue paying property taxes, insurance, and home maintenance
• Participate in a consumer information session given by a HUD-approved counselor

Our Reverse Mortgage Counseling Services

Our HUD-certified counselors provide comprehensive reverse mortgage counseling that includes:

• Explanation of how reverse mortgages work and their implications
• Discussion of your specific financial situation and needs
• Analysis of the costs and benefits of a reverse mortgage for your situation
• Exploration of alternatives to reverse mortgages
• Information about different payment options and their implications
• Discussion of your responsibilities as a reverse mortgage borrower
• Explanation of the impact on your estate and heirs
• Issuance of the required counseling certificate upon completion

Important Considerations

Before deciding on a reverse mortgage, it's important to consider:

• The impact on your heirs and estate
• The costs involved, including origination fees, mortgage insurance, and servicing fees
• How long you plan to stay in your home
• Your ability to maintain the home and pay property taxes and insurance
• How a reverse mortgage might affect your eligibility for means-tested benefits like Medicaid
• Alternative options that might better meet your needs

Our counselors will help you understand these considerations and how they apply to your specific situation.