Reverse Mortgage Counseling Explained
Goes deeper into what to expect from counseling: how to choose a counselor, what documents to bring, what questions to ask, and how the certificate you receive fits into the application timeline. Coming prepared makes the session more valuable.
Key points
- How to choose a HUD counselor
- What to bring and what to ask
- You receive a counseling certificate
- Fits into the application timeline
Video transcript
Hello, my name is Miguel Vazquez. I'm a reverse mortgage specialist and I help homeowners get a reverse mortgage. I've been doing reverse mortgages for over 15 years now, and I want to thank you for taking the time to watch this video.
Let's talk about reverse mortgage counseling. Telephone counseling is required to get an FHA (HECM) or jumbo reverse mortgage. It's an impartial educational resource that helps seniors and their family members make an informed decision. Counseling is designed to make sure people understand how a reverse mortgage works and to protect seniors from losing their home or being taken advantage of. We believe in counseling — we think it's a good thing.
A few practical notes:
• The counseling course typically costs about $125–$150, though some HUD-approved agencies offer it at no charge.
• Call early. The first time you call is usually just to set up your counseling date, which is often about a week later.
• The session lasts about 45 minutes.
• Sessions are available in different languages, including English and Spanish.
• It's not a test — you can't fail it. It's mostly informational.
Here are some of the key points counseling will cover:
1. Your house is your house. It does not belong to the reverse mortgage — you own your home, not the lender, and your name stays on the deed. The lender places a lien on the title, just like a conventional mortgage, but they do not go on the deed.
2. You do not have to make monthly payments to the lender.
3. You must continue to pay property taxes, homeowner's insurance, maintenance, and HOA dues if applicable — otherwise the loan can go into default. The lender does not pay these property charges for you.
4. There are three ways to access your money: a line of credit, a lump sum at closing, or a monthly check. You can use a combination of the three, and you can change your mind later.
5. Once you've taken out all the money, you cannot get more. But having access to all your money does not mean you have to move or sell.
6. The loan becomes due and payable when the last borrower passes away, moves, or is absent from the home for 12 consecutive months.
7. If the loan balance ever exceeds the value of the house, that is not your problem or your heirs' responsibility. Because it's a non-recourse loan, FHA insurance reimburses the lender for any shortfall.
8. A reverse mortgage may leave you or your heirs with less in the future if the loan balance grows more than the home appreciates.
9. You can make payments to lower your balance whenever you want, with no penalty.
10. The house does not have to be sold when the loan is due. It can be refinanced or paid off with other funds.
The reverse mortgage company does not want to keep your house or have you lose your home — but it's also not a free loan. It helps you access your money and live with less stress.
If you have any questions about counseling or reverse mortgages, feel free to call or text me at 562-881-9811. The consultation is free, and I'm also happy to visit you at the comfort of your home to explain everything and answer your questions. Thank you for taking the time to watch this video.