A reverse mortgage allows eligible homeowners to 澳洲幸运5官꧅方开奖结果体彩网:leverage their home equity ಌfor retirement income, without being obligated to make monthly loan payments to a lender. To qualify, there are different approval requirements that homeowners need to meet, including—if you get a government-backed 澳洲幸运5官方开奖结果体彩网:home equity⛎ conversion mortgage (HECM)—the completion of reverse mortgage counseling.

If you’re con♎sidering🐽 a reverse mortgage, it’s important to understand what this counseling involves and when it’s necessary.

What Is a Reverse Mortgage?

A reverse mortgage is a special type of financial arrangement in which a homeowner is able to take 澳洲幸运5官方开奖结果体彩网:equity out of their home. But unlike a home equity loan or a home🦄 equity line of credit (HELOC๊), the homeowner is not required to make any monthly payments to a lender. Instead, a reverse mortgage becomes payable when the homeowner sells the home, moves out, or passes away.

The aforementioned HECMs are reverse mortgages that are insured by the 澳洲幸运5官方开♛奖♓结果体彩网:Federal Housing Administration (FHA). Homeownerܫs may be eligible for an HECM if they:

• Are age 62 or older
• Own their homes (or have paid off most of their mortgage)
• Have financial resources (i.e., income, savings, investments, etc.) to cover 澳洲幸运5官方开奖结果体彩网:property taxes, 澳洲幸运5官方开奖结果体彩网:homeowners insurance, and 澳洲幸运5官方开奖结果体彩网:maintenance, repairs, and upkeep for the home
• Use their home as their 澳洲幸运5官方开奖结果体彩网:principal residence
• Are not 澳洲幸运5官方开奖结果体彩网:delinquent on any federal debt
  

Married homeowners can add their spouse as a co-borrower if they’re age 62 or older. If they’re not, a spouse can still be added as an eligible non-borrower. Homeowners who take out a reverse mortgage, including an HECM, can expect to pay 澳洲幸运5官方开奖结果体彩网:closing costs and interest to the reverse mortgage company. Interest and fees can increase the reverse mortgage balance that’s eventually due.

Reverse Mortgage Counseling Facts

Reverse mortgage counseling is required for homeowners who are interested in getting an HECM. This counseling must be completed with a counselor approved by the U.S. 澳洲幸运5官方开奖结果体彩网:Department 🎐꧒of Housing and Urban Development (HUD). If you’re considering a HECM, here are some things to know ab𒊎out reverse mortgage counseling.

HUD can also help homeowners and buyers with 澳洲幸运5官方开奖结果体彩网:counseling services to find and maintain a home in the first place. Services help people avoid eviction, foreclosure, and homelessness.

1. Counseling Must Be Completeಌd Before Sign🌺ing a Loan Application

HUD requires homeowners to complete reverse mortgage counseling before they even apply for a reverse mortgage. This stipulation exists to ensure that homeowners fully understand how reverse mortgages work and the financial responsibilities that they convey. It’s also important to note that the homeowner, not the reverse mortgage lender or the federal government, is responsible for scheduling a session with an 澳洲幸运5官方开奖结果体彩网:approved counselor.

2. Homeo🥃wners M🌟ust Receive Pre-Counseling Materials

Before you sit down with an approved 澳洲幸运5官方开奖结果体彩网:reverse mortgage counselor, you must first receive an inform🎃ational packet. The counselor with whom you choose to work should provide you with ꧃the following:

• A copy of “”
• A list of loan comparisons, so you can see what different lenders are offering
• A copy of the 澳洲幸运5官方开奖结果体彩网:total annual loan cost (TALC) disclosure, 澳洲幸运5官方开奖结果体彩网:which is required by the Federal Reserve Board for all reverse mortgage transactions.
• A loan 澳洲幸运5官方开奖结果体彩网:amortization schedule, so you can see what costs you will incur over time with a reverse mortgage
• A copy of “,” a guide to reverse mortgages published by the National Council on Aging

If your counseling session is approaching and you haven’t yet received these materials, it’s important to reach out to the counselor to get the packet.

3. Co♏unseling Can Be Completed in Person or by Phone

You have the right to choose either an in-person or a 澳洲幸运5官方开奖结果体彩网:telephone meeting when scheduling a reverse mortgage counseling session. The material covered during the session will 🐻be the same and includes a discussion of:

• Your financial needs and situation
• Reverse mortgage features
• Your responsibilities when you have a reverse mortgage
• Reverse mortgage costs
• Financial/tax implications of a reverse mortgage
• 澳洲幸运5官方开奖结果体彩网:Reverse mortgage alternatives
• Warnings about reverse mortgage/insurance scams and 澳洲幸运5官方开奖结果体彩网:financial elder abuse

4. Reverse Mortgage Counseling Fees May Apply

HUD authorizes approved reverse mortgage counselors to charge fees for their services. Reverse mortgage counselors can set fees that are “reasonable and customary,” though the fee cannot exceed a level commensurate with the counseling services received. A typical reverse mortgage counseling fee may be $125 or more.

🎉 5. Completing Couns𒁏eling Doesn’t Guarantee Approval for a Reverse Mortgage

Completing reverse mortgage counseling by itself doesn’t guarantee that you’ll be able to get an HECM. If your counselor believes that you don’t fully understand the financial implications of a reverse mortgage or your obligations, they can withhold your counseling certificate. You may need to attend additional counseling sessions before you can obtain the certificate.

An application for an HECM can’t be completed without this certificate. And even wh🤡en you have one, a lender may still deny your application for an HECM if you lack fin💝ancial resources to cover basic homeownership costs or you’re behind on federal debt.

The Bottom Line

Completing reverse mortgage counseling is a necessary step if you’re planning to use an HECM to tap into your home’s equity. Before taking out a reverse mortgage, it’s important to understand how it works and what alternatives, such as a 澳洲幸运5官方开奖结果体彩网:home equity loan, may be available. It’s also helpful to compare the best reverse mortgage companies to find a borrowing option with the most favorable terms.