Reverse Mortgage

Counseling for a Reverse Mortgage- What is it?

By Pam Hoffine

A reverse mortgage is a unique home loan unlike any other kind. It actually allows a homeowner the opportunity to change part of their present equity into a lump sum cash payout, monthly payments or a credit line. You can be paid out the equity that has been amassed during the years you were making your home mortgage payments. Although a traditional second mortgage/equity loan would require monthly payments, this type of transaction does not. You do not have to repay the loan until you are no longer living in the home as your permanent residence.

HUD and FHA work together to create the HECM, which is Home Equity Conversion Mortgage. This reverse mortgage is federally insured, and can provide one with many benefits. Required by the HECM, is for the person to make use of a Reverse Mortgage Counselor, which is to be of a great advantage. Does a reverse mortgage require counseling beforehand? Definitely. Counseling is a precaution of reverse mortgages and is necessary for all three current reverse mortgage products. Without counseling you cannot get a reverse mortgage. Reverse Mortgage Counseling is when an independent party explains to you everything involved with a reverse mortgage. It is FREE and can actually be accomplished over the telephone or you can go to the physical place.

You can get a list of area-wide HUD Counselors from a Reverse Mortgage Lender. The counselor is going to be sure you understand the process and that it used to protect you. Reverse Mortgage Counseling is required but is actually a great advantage for the borrower. The borrower can expect the counseling to last as few as 25 minutes or up to around 2 hours if there are lots of questions from the borrower. Be sure that, once your appointment has been scheduled, you bring all of the necessary documentation the counselor has requested. This will speed up the process to obtain a reverse mortgage loan.