Before taking out a home equity conversion mortgage (or HECM) loan, you’re required by law to take part in a third-party counseling session with a government-approved housing counselor. This counseling session is meant to help you and other potential borrowers be fully versed in all the options available, be educated on the HECM  itself and provide you with support and guidance throughout it all. If you’ve made it to this step in your HECM process, here’s what to expect from a counseling session. Note that the role of a government approved counselor and the key points counseling sessions must cover is set by the Department of Housing and Urban Development (HUD). What to Expect From a HECM Counselor
  • Education: Explanations of reverse mortgage features. Discussions of the appropriateness of a reverse mortgage based on your individual situation, and other financial options that might meet your needs.
  • Guidance and resources designed to enable you to make an informed decision
  • Ongoing support throughout the HECM process.
Note that the counselor will not tell a client whether or not they should proceed with a reverse mortgage, or specify a reverse mortgage product to use. Counseling Session Topics HUD requires that counselors cover the following topics in every reverse mortgage counseling session:
  • Your individual needs and circumstances
  • Features of a reverse mortgage
  • Your responsibilities under a reverse mortgage
  • Costs to obtain a reverse mortgage
  • Financial/tax implications of a reverse mortgage
  • Financial or social service alternatives to a reverse mortgage
  • Warnings about potential reverse mortgage/insurance fraud schemes and elder abuse
Other Things To Know Before You Go
  • Depending on your financial circumstances, there may be fees for your counseling session. Our short, three-minute video explains more.
  • HUD encourages face-to-face counseling, and certain states require in-person counseling for all borrowers considering reverse mortgages. For clients that can’t meet in-person, it may be possible to engage in telephone counseling.
  • You can search for a government-approved third party counselor near you on HUD’s website here.

Things to know about Reverse Mortgages:

  • At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds
  • Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees
  • The loan balance grows over time and interest is charged on the outstanding balance
  • The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home
  • Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment
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