I am pleased to report that starting today Money Management International (MMI) is offering free reverse mortgage counseling sessions. This incredible resource for homeowners 62 years of age or older is made possible by a $1.4 million grant from the U.S. Department of Housing and Urban Development (HUD). The free sessions will be offered through September 2010, at which time new HUD grant funds will become available.
If you are considering this unique loan product, you probably have a lot of questions. Following are some of the most common questions homeowners ask about reverse mortgages (and their answers!).
What is a reverse mortgage? A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), is a type of loan that allows homeowners, 62 years of age or older, to convert part of their home’s equity into tax-free income. As long as you continue to occupy the property as your primary residence, no payments to the loan are required.
Who should consider a reverse mortgage? The National Council on Aging estimates that 13 million homeowners are candidates for reverse mortgages. If you are 62 years of age or older and have low or no outstanding mortgage debt, a reverse mortgage may allow you to borrow against the equity in your home. According to the U.S. Department of Housing and Urban Development (HUD), many seniors use reverse mortgages to supplement social security, meet medical expenses, and make home improvements.
What is reverse mortgage counseling? To be considered for a reverse mortgage, HUD’s Federal Housing Administration (FHA) requires that you participate in a counseling session with an approved nonprofit housing counseling agency. During your reverse mortgage counseling session, your counselor will work with you to help explain how reverse mortgages work, the financial and tax implications of taking out a reverse mortgage, payment options, and costs associated with a reverse mortgage. Reverse mortgage counselors are not lenders or financial advisors. Their job is to help you understand your financial options so that you can make an informed decision. At completion of the session, the counselor will issue you a certificate that must be provided to the lender you choose to work with. At MMI, we have counselors certified by HUD who specialize in helping consumers, 62 years of age or older, explore and evaluate this financial tool.
How can I schedule an appointment? For more information or to schedule an appointment, visit our section dedicated to reverse mortgage counseling. You can prepare for your appointment by checking to see if you are eligible. To do this, you can use the AARP reverse mortgage calculator.
As always, if you have a specific question, you are welcome send it by email through our Ask the Experts advice column or call 866.889.9347 and speak to a counselor immediately.