Getting Ready for HUD Counseling
Before you can apply for a HECM reverse mortgage, federal law requires that you complete a counseling session with a HUD-approved housing counseling agency. This session is designed to ensure you fully understand the reverse mortgage process, costs, and alternatives. Here's how to prepare.
What Is HUD Counseling?
HUD counseling is an independent educational session conducted by a counselor who is not affiliated with your lender. The counselor's role is to provide objective information about reverse mortgages and help you evaluate whether a HECM is appropriate for your situation. The session typically lasts about one hour.
How to Schedule
Your reverse mortgage advisor can provide you with a list of HUD-approved counseling agencies. You can also find agencies through HUD's website or by calling the HUD Housing Counseling Helpline. Sessions can be conducted in person, by phone, or via video conference. There is typically a fee of around $125, which can sometimes be financed into the loan.
What to Bring
Have the following information available for your counseling session: your current mortgage statement (if applicable), recent property tax bill, homeowners insurance declaration page, any benefit comparison or loan estimate documents your advisor has provided, a list of your monthly income sources and expenses, and any questions you want to ask.
What the Counselor Will Cover
The counselor will explain: how reverse mortgages work, the different types of reverse mortgages, costs associated with the loan, your obligations as a borrower, alternatives to a reverse mortgage, the impact on your estate and heirs, and the right of rescission.
Questions to Ask
Come prepared with questions specific to your situation. Good questions include: How will a reverse mortgage affect my specific benefits? What are the risks I should consider? What alternatives should I explore? How do the costs compare to other options? What happens if I need to move to a care facility?
After the Session
After completing counseling, you'll receive a counseling certificate, which is required to proceed with your reverse mortgage application. This certificate is valid for 180 days. Take time to review what you learned and discuss it with family members before moving forward.
