In my opinion, reverse mortgage counseling is the most important part of the reverse mortgage process…and for good reason.
These days more than ever, seniors are taking reverse mortgages at younger and younger ages to access the equity in the homes due to the weak economy.
The problem is, however, that reverse mortgages may not be the ideal solution for your financial situation. In fact, I recently detailed several of the more popular alternatives to reverse mortgages in a previous post.
And these alternatives will be one of the things that your counselor will stress.
Find Your Counselor
The first step will be for you to find your counselor.
This is accomplished through the National HECM Counseling Network, which provides a link to several FHA-approved counselors who can administer the counseling and assist you in determining whether or not this reverse mortgage is the right decision for you.
One thing to note, as I write this the counseling session will cost you $125, but you cannot be turned down based upon your inability to pay, as reverse mortgage counseling is required by the government to close on the loan.
The Actual Reverse Mortgage Counseling Session
The actual counseling session can take place via a face-to-face visit or over the phone. During it, the counselor will be going over your financial goals relating to the reverse mortgage and will…
Take a look at your individual situation and given you an honest evaluation of the positives and the negatives that could come about as a result of going ahead with the reverse mortgage, and more importantly…
Give you ideas and resources that may enable you to find a cheaper alternative to the reverse mortgage
For example, if you are taking the mortgage with the purpose of improving your home and making it more energy efficient, the counselor will let you know about government grants that may be available to you where you could get the work done for free as opposed to borrowing money.
Armed with this information provided by the reverse mortgage counseling, you will be in a better position to determine whether the reverse mortgage is right for you.