Choosing a Counselor

Source: AARP Foundation Reverse Mortgage Education Project |  | April 25, 2003

To be eligible for a federally insured Home Equity Conversion Mortgage (HECM), you must discuss the loan with a counselor employed by a nonprofit or public agency approved by the U. S. Department of Housing and Urban Development (HUD).

Checklist

Considered All Your Options?
Have you seriously explored the options and alternatives discussed in the Other Choices section of this Web site's Reverse Mortgages information?

Could You Get Enough Money?

• If you now owe any money on a debt against your home, you would have to pay off the full amount you owe to get a reverse mortgage. But you could use money from the reverse mortgage to do that.
• Example: If you now owe $20,000 on a home equity loan and could get $100,000 from a reverse mortgage, you could use $20,000 from the reverse mortgage to pay off the home equity loan — which would then leave you with $80,000 from the reverse mortgage.

Finding a Counselor

• Use the link to HUD’s National HECM Counseling Network in the "Additional Resources" below. 
• Call AARP at 1-800-209-8085 (toll-free) Monday to Friday from 7 AM to 12 midnight Eastern time, and ask for reverse mortgage counseling. The operator will use the link in the "Additional Resources" below to find a counselor from HUD’s National HECM Counseling Network.

Counseling agencies may charge a fee for HECM counseling, but they must tell you about it before the counseling occurs, and the fee amount must be based on your ability to pay. Agencies cannot turn you away because of your inability to pay, and they cannot refuse to counsel you if you fail to pay. The maximum allowable fee in 2008 is $125 or the actual cost of providing the counseling, whichever is less. If your counseling agency charges a fee, you can have it paid out of your loan proceeds just like other HECM fees, or you can pay it directly to the counseling agency.

AARP does not endorse any reverse mortgage lender or product.