An important and required step in obtaining a HECM reverse mortgage is going through an independent reverse mortgage counseling session. Did you know that the counselor must ask 10 questions throughout the session to make sure the senior understands the key elements of a reverse mortgage? It’s true. Counseling agents must determine the borrower’s level of comprehension of the HECM products by asking 10 questions throughout the counseling session. Should at least 5 of these questions be answered incorrectly, the counselor may withhold the counseling certificate and schedule a follow-up meeting. The following are a list of questions from which the counselor must choose ten to ask the client:General Questions About Reverse Mortgages and HECMs
When you have a reverse mortgage, who owns your house (whose name is on the title/deed)?
There are several “payment options” or ways to get money from a reverse mortgage. Which payment option do you think will best meet your needs? What other choices do you have (if applicable)? What happens if you change your mind later and want to change your payment plan?
When you have a reverse mortgage, do you have to make a monthly payment to the bank?
Does the money you get from a reverse mortgage ever have to be paid back?
Questions about the Implications of a Reverse Mortgage
When does the reverse mortgage have to be paid back?
What homeowner responsibilities will you continue to have after you get a reverse mortgage? What may happen if you do not keep up these responsibilities as a borrower?
What happens if you use up all the money that is available from the reverse mortgage? Offer an example tailored to client’s circumstances, such as, “What if you took all the money from the reverse mortgage in a lump sum and spent every bit of it? What would happen to you? Would you be able to go on living in your house?”
What happens if the amount you owe under a reverse mortgage gets to be greater than your home is worth at that time? Would you have to move out of your house? Would you have to take out another loan to pay the difference?
If you get a reverse mortgage, how does that change the amount of money that you will have to leave to your children (or other heirs)? Will your children or other heirs inherit more or less after you die, than they would have without the reverse mortgage?
How does a reverse mortgage change the amount of money you would have left to take with you if you moved somewhere else like into a retirement community? Will you have more or less left over to spend if you move somewhere else?
Questions for HECM Refinances
If you refinance your current HECM, will you still have to pay mortgage insurance? How does this work?
What are some of the additional costs you will incur with a refinance?
Questions for Purchase HECMs
When you purchase a home with a HECM, will the HECM be held on your existing home or your newly purchased home?
How will the lender determine how much money you will need at closing? What sources of funds (money) are allowed when you purchase a home with a HECM?
Why is it important to get a home inspection?
When you are working with a real estate professional, what are some of the questions you should ask him/her?
Reverse Mortgage Counseling Discussion
We are happy to discuss any reverse mortgage counseling questions or concerns with you. Please feel free to call us toll free at 1-888-888-4834 or apply online.
Our philosophy is that our clients shouldn’t learn anything new during their counseling session if they’ve spent time with us learning about a HECM reverse mortgage. Our goal is to educate first and should a reverse mortgage be a viable solution we will strive to provide a competitive fee quote and top notch customer service.