A reverse mortgage is a way to realize some of the money that a homeowner has invested in his property. This can take the form of a credit line, a one time payment, or even monthly payments. This money is not taxable. It may be used for anything the borrower needs or wants. There is no credit check, the only requirement is that the borrower be at least 62 years of age.
Why Counseling?
The government has made counseling a requirement for getting a reverse mortgage. This was done to protect the elderly from scam artists or from being pressured to get a loan by family members. A counselor will make sure the borrower fully comprehends all the details of the reverse mortgage. All rights and responsibilities, any costs that the loan may engender and how this will effect the estate after the home owner has past away.
Are Reverse Mortgage Counselors Under Qualified?
The department of Housing and Urban Development is responsible for the development and application of the tests and licensing of the counselors who pass the test. Are Reverse Mortgage Counselors Under Qualified? After complaints that the counselors were not always up to date with all the information needed to inform the borrowers, the tests were made more difficult. This has resulted in more of the counselors having problems passing the test. It has also caused a worry that there may not be enough qualified counselors for all the people who wish to take advantage of the program.
Where can you find counseling?
Any lender that wants to be part of the program, is required to provide the borrower with the names of at least 5 agencies that are licensed to provide counseling. Upon completion of the counseling, the borrower is given a certificate that is good for six months.
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