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Category : Reverse Mortgage

If you’re interested in pursuing a reverse mortgage, it’s important to note that participating in housing counseling from a government-approved agency is mandatory. Both the government and your lending institution want to ensure that you are 100% ready before you officially sign off on a reverse mortgage. It’s important to think of this process as helpful and not invasive. Counseling will make certain you’re not blindsided by any part of your reverse mortgage. Let’s take a look at what housing counseling is and how it can benefit you. 

The Definition

Reverse mortgage counseling is the process of educating clients on what exactly a reverse mortgage is and what they can expect during the time of signing, as well as, in the future. Counseling must follow HUD guidelines and take place with trained counselors. During your counseling sessions, the following may be discussed:

  • Eligibility requirements.
  • Potential financial implications.
  • Payment provisions.
  • Reverse mortgage appropriateness based on current personal and financial needs.
  • Possible alternatives.

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Why is it Important?

Reverse mortgage counseling is important because it ensures you fully understand all of the necessary requirements needed to make an educated decision. During counseling, you’ll also learn about the different types of reverse mortgages. Giving you an opportunity to make a decision based on which one may work best for you. 

Reverse Mortgage Counseling Requirements

The requirements for reverse mortgage counseling are as follows:

  • Be at least 62 years of age – Some reverse mortgages, such as a jumbo reverse mortgage allows clients to be 60 years of age, instead of 62. However, 62 years of age is usually the standard to participate in reverse mortgage counseling
  • Have paid off the majority of your mortgage or fully own your home – Most lending institutions require clients to have at least 50% equity to qualify for a reverse mortgage
  • Have no outstanding federal debt – You must have no delinquent debt
  • Must reside in the home you wish to take out a reverse mortgage – The home in which you’ve taken out a reverse mortgage must be your principal home and you must live there for the majority of the year
  • Be up to date – You must be current with all of your property taxes, insurance, homeowners association (HOA) fees

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Is a Reverse Mortgage the Best Choice for You?

While considering reverse mortgage counseling, you may wonder if a reverse mortgage is the best choice for you. A reverse mortgage may be a good option for you if:

  • Your retirement account is short on cash 
  • You want to repair or renovate your home
  • You have existing debt that has become a burden
  • You want to sustain your lifestyle 
  • You want to purchase a new home

If you’re interested in pursuing reverse mortgage counseling in California or would like to take out a reverse mortgage, contact us to learn more today.