money from a reverse loan
As mentioned in my previous 2 posts, counseling by an HUD approved agency is required by the federal government prior to applying for a Reverse mortgage.
Now, that does not mean or obligate anyone who completes the counseling to apply for this loan, it’s simply an excellent option for anyone that is seeking accurate information about the HECM program and not be influenced by some of the myths that continue to circulate about it.
I can provide a list of some of these approved agencies and they do typically charge an $125 fee for their service. But it’s worth it, plus once completed the “applicant” will receive a HUD Counseling Certificate that verifies they have completed the counseling and if they decide to move forward on a loan application, they will need to give this to the Loan Officer.
Here is the remainder of the article about counseling that I have been sharing on my blog.
“Clarifying what makes the reverse mortgage become due and payable creates some surprise among prospective borrowers, Tetreault said, but it also opens the door to other questions that seniors might not have thought about previously, such as what happens if they do not pay property taxes and insurance payments on time.
“We talk about what their responsibilities are as reverse mortgage borrowers to make sure they do not put themselves at risk of foreclosure,” she said.
The million-dollar question
HECM counseling is a necessary stepping stone in the older homeowner’s journey to get a reverse mortgage. This decision is typically prompted by a significant need, whether that is the result of an unexpected personal issue or even the intrigue of using home equity to supplement retirement wealth.
In many cases, the million-dollar question is: how much money can I get from a reverse mortgage?
One of the things ClearPoint does off-the-bat is ask counselees how they plan to use the money they receive from a reverse mortgage; whether that means using these funds for daily or future expenses, paying off debt, etc.
In understanding what the loan proceeds will be used for, Tetreault said counselors can help prospective borrowers determine if a reverse mortgage is really the right product for them, or if there are other alternatives that might fit best with their financial plans.
At the end of the day, the decision to get a reverse mortgage hinges upon education and the awareness of what other resources are available to seniors that can help them accomplish their personal needs.
“Education empowers consumers,” Tetreault said. “Whether seniors take that information and decide to get the reverse mortgage or not, at least they are educated and have an understanding of all the choices and options available to them.”
Written by Jason Oliva/Reverse Mortgage Daily