For adults 62 years and older, taking out a reverse mortgage on your home is a big step. But if you’re trying to supplement your income during retirement, this might be the direction you’re heading. To take out a reverse mortgage, however, you’ll have to complete housing counseling with a certified mortgage counselor.
But first, what is a reverse mortgage? A Home Equity Conversion Mortgage, also known as a reverse mortgage, is a loan that you borrow against your home equity, so you should have considerable equity to get started. As long as you’re living in the home, you don’t have to pay the money back.
For homeowners wishing to take out a reverse mortgage, it’s required by the U.S. Department of Housing and Urban Development that you get counseling, so you know how a reverse mortgage works and understand all your options.
But housing counseling provides more benefits than just a certificate that lets you move on to the next step.
Your counselors can also help you:
• Develop a budget that’s more sustainable for your household
• Help you pay for energy, meals, and medications through private and public benefits
• Decide whether a reverse mortgage is right for you
• Provide you the tools you need to successfully navigate your reverse loan
• Give you unbiased advice
When you meet with a housing counselor for reverse mortgage education, you’ll learn more about how the entire process works, including taxes, hidden fees, financial responsibilities, and other alternatives to the reverse mortgage.
As you move forward with the steps to secure a reverse mortgage, knowing your housing counselor is there to serve your needs—and not the lender—can help you be more secure and confident in your decision while also giving you the tools to succeed.
Housing counseling also offers more services to homeowners and buyers in different stages. If you’re a first-time home buyer, counseling can help you understand your options and navigate federal and state programs. For current homeowners struggling to pay your mortgage, counselors can work with your lenders to help you avoid foreclosure.
Whether you’re worried about foreclosure, looking to buy your first home, or want to take out a reverse mortgage, housing counseling is a great first step.