Reverse Mortgages Require a Counseling Session

All California reverse mortgage applicants are required to go through counseling with a certified agency. Reverse mortgage counseling used to be free – but congress underfunded the program and now most borrowers pay between $75 and $125 for the session. It also used to be that the senior would drive down to a local consumer credit counseling agency to meet with a counselor. Now most reverse mortgage counseling appointments are conducted over the phone. The counselor may be in another state. Counseling agencies are certified by the US Department of Housing and Urban Development and the Federal Housing Authority to offer counseling on the Home Equity Conversion Mortgage (HECM). Agencies might also offer counseling on any one of the non-FHA reverse mortgage programs.

Counselors go over topics including reverse mortgage interest rates; financial implications of a reverse mortgage including the addition of interest to the principal balance; fees and costs; owner occupancy requirements; borrower eligibility and calculation of the loan amount; borrower responsibilities; loan repayment; and reverse mortgage effects on taxes, public benefits, their estate and heirs.

Seniors may not like the thought of being required to undergo counseling. They might worry that it is a test that they could fail. But reverse mortgage counseling is just another way of disclosing the loan terms for the California reverse mortgage. The senior cannot "fail". The only potential risk is that the counselor is given a strong reason to suspect that the senior is not competent and is not able to understand what is being told to them. In that case, the counselor may choose to not continue the counseling session.

Not all states require reverse mortgage counseling for all reverse mortgages. But counseling is always required for the HECM. In California, reverse mortgage counseling must take place prior to the senior homeowner financially committing to the loan.

Reverse mortgage counseling is a great double-checking procedure to ensure that lenders are being honest. Seniors must know that a reverse mortgage does not give them "free money". A reverse mortgage is a real mortgage on their house that will eventually be repaid. But reverse mortgage counseling also helps comfort seniors who are concerned about the reverse mortgage and want to talk with an well-informed and independent third party. Contact a reverse mortgage lender and ask them to put you in touch with a reverse mortgage counselor.

Reverse-Mortgage-Info.net is a division of FutureSafe Financial specializing in reverse mortgages California and offering qualified senior reverse mortgages for those 62 years and older. Please contact Reverse-Mortgage-Info.net for more information and a risk-free reverse mortgage quote.