What is Reverse Mortgage Loan Counseling?
Reverse Mortgage Loan Counseling
To apply for an FHA Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage loan, a borrower is required to complete a counseling session with a non-profit HUD-approved counselor. Counseling is typically completed after meeting with a licensed reverse mortgage specialist.
The counselor will explain the reverse mortgage features and discuss other potential options. The counselor’s role is to make sure you have a good understanding of this loan product as well as making sure you are not under any pressure to move forward.
At Direct Finance, we typically will have met with you once or twice before your counseling session. Our hope is that you will find the mandatory counseling somewhat “boring” which would mean we did an excellent job in explaining all the details.
In Massachusetts, the counseling session must be in person whereas in Rhode Island, Maine and New Hampshire you have the option of completing counseling by telephone. You are welcomed to invite any family members or other trusted advisors.
The cost of the counseling varies but is typically between $175 to $250. Lenders are not permitted to pay this fee for applicants. Homeowners may also contact the counseling agency to request a “hardship” approval that allows them to pay a reduced fee or to use the loan proceeds to pay for counseling.
After the counseling session, the borrower receives a “certificate of counseling” that is required before the loan application can be processed. The reverse mortgage loan application process cannot begin until counseling is completed and a fully executed counseling certificate is provided to the lender.
Direct Finance Corp. can provide a list of HUD-approved reverse mortgage counselors in your area. Call us today at 877-499-7283. Or simply complete our easy-to-use web contact form.
These materials are not from HUD or FHA and were not approved by HUD or a government agency.