Choosing a Counselor
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).
The counseling is generally free and can be very helpful. So using this service can be a good idea even if you are thinking about applying for other types of reverse mortgages.
The first step is to decide if you are ready for formal reverse mortgage counseling. This checklist can help you decide if you're ready to take that step.
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?
Are You Eligible?
Are you and all other owners of your home at least 62 years old?
Does each owner live in the home at least six months out of the year?
Is the home a single family residence, duplex, triplex, 4-unit residence, a condominium, or a planned unit development (PUD)?
If you answered "Yes" to each question, then most likely you are eligible for a HECM. If you answered "No" to the last question, you may still be eligible if you live in certain types of manufactured housing. Only a reverse mortgage lender can determine for certain if you are eligible.
Could You Get Enough Money?
Could a reverse mortgage give you the amount of money you would need to get from it?
Use the Reverse Mortgage Calculator to estimate how much you could get from a HECM and a nationally-available proprietary loan.
Here are some things to keep in mind:
- 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. - If your home is worth a lot more than the average home in your county, or over $500,000, you might be able to get more than the estimated amounts from a proprietary reverse mortgage. A counselor can help you find out if you could get more and show you how much more it is likely to cost.
Finding a Counselor
There are three ways to find a reverse mortgage counselor. You can:
- Use the link to HUD’s National HECM Counseling Network in the "Additional Resources" below. These counselors have individually qualified to be members of this network (see 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.
- Use the link to the HUD-Approved Housing Counseling Agencies in the "Additional Resources" below. Some of these counselors charge a fee.
AARP Foundation Reverse Mortgage Education Project
The Project administers a national HECM Counselor Exam for counselors who work for HUD-approved HECM housing counseling agencies. Counselors who pass the exam are eligible to participate in HUD’s National HECM Counseling Network. These network counselors are the only HECM counselors approved by HUD to offer HECM counseling by telephone on a nationwide basis. They use loan analysis and comparison software that meets AARP's model specifications. They provide in-person counseling in their local areas and counseling by telephone in other areas nationwide. This counseling generally takes at least one hour. When provided by telephone, it typically takes two or more calls.
Who Can Request Counseling
The homeowner or the owner's authorized legal representative can request reverse mortgage counseling. Authorized legal representatives can be a guardian, conservator, or a person holding a durable power of attorney who has been authorized to act in this matter by the owner.
AARP Resources
AARP's Model Specifications for Analyzing and Comparing Reverse Mortgages (Adobe Acrobat required)
The purpose of AARP's model specifications, the process by which they were developed, and technical details needed to implement them.
Additional Resources
HUD’s National HECM Counseling Network
Read the page at this URL and then click on the link at the bottom of it to reach a state-by-state list of HUD’s National HECM Network Counselors.
AARP does not endorse any reverse mortgage lender or product.
