What Do I Need for My Reverse Mortgage Counseling Session?
Reverse mortgage counseling is a requirement of all reverse mortgage loans insured by the Federal Housing Administration.
The counseling session is designed to make potential borrowers aware of their options and empower them with the information they need to make smart choices.
There are several things you can do in advance of your appointment with a Department of Housing and Urban Development (HUD)-approved counseling agency, which conducts counseling either over the phone, or in person, depending upon the agency you choose.
Here are a few things to think about in order to make your counseling session as smooth and effective as possible.
What Documents Do I Need for the Session?
Before you can attend the reverse mortgage counseling session, HUD requires that you receive several documents. These include:
- Loan comparisons, TALC (Total Annual Loan Cost), loan amortization schedule
- “Use Your Home to Stay at Home” booklet from the National Council on Aging
- HUD Booklet: Preparing for your counseling session
Borrowers can receive these documents directly from the counseling agency when they schedule an appointment or some lenders will provide them as well.
Borrowers are encouraged to review all of the loan documents and materials in advance of the counseling session in order to make the most of the time with the counselor.
What Should I Expect During the Counseling Session?
It’s a good idea to block off an hour for the session, which is designed to take 60 minutes but can take longer, if necessary.
The counselor will go through a series of questions about your financial situation, home equity preferences and long term goals. The counselor will cover the features and costs of a reverse mortgage. He or she may also identify certain state and federal benefits that can assist senior homeowners.
During the process, the counselor will construct a budget detailing sources of income and living expenses. He or she will also detail the obligations a borrower must meet after the loan closes, including taxes, insurance and upkeep of the home.
Counselors are also required to discuss alternatives to a reverse mortgage, such as home equity loans, moving and deferring certain benefits.
It’s a great time for borrowers to ask any questions that they may have about how it can impact their financial situation.
Who Should Attend?
Recent changes to reverse mortgage counseling rules require any non-borrowing spouse to attend the session along with the borrower. In addition, all owners shown on the property deed should attend as well. While it is not a requirement for other family members to attend, it isn’t a bad idea to include them.
Counseling agencies encourage borrowers to bring friends or family to the counseling session and are equipped to answer any questions that they might also have.
Other Considerations
Some counseling agencies offer additional pre-counseling preparation via conference calls or online resources. Check with your counseling agency to find out more about additional preparation that might be available through your individual agency.
Once you complete the counseling session, you will receive a counseling certificate as proof of completion. Don’t lose the certificate, as it is something your lender will need in order to move forward in the loan process.
To find out more about counseling or to locate a counseling agency, see our reverse mortgage counseling section to learn more.