The new HECM counseling protocols require homeowners to complete a counseling session before or after making an application.
HECM Counseling Protocols
HECM counseling is a mandated part of the reverse mortgage requirements for senior homeowners. Borrowers may be asked to participate in the education session either before or after completing the necessary application. This session in intended to give unbiased information and answer any questions the homeowners may have concerning the reverse mortgage process. The session may be conducted over the telephone or in person at a participating counseling agency. A counseling certificate will be mailed to the homeowners after the completion of the session.
HECM Counseling Charge
A fee of $125 is charged for the reverse mortgage educational counseling session which cannot be paid for by the lender, but may be refunded at the closing. Some applicants may choose to submit a financial hardship letter to waive all of most of the counseling fee.
HECM for Senior Homeowners
Senior homeowners may choose to select a HECM sponsored reverse mortgage that provides capped closing costs and loan related fees. The FHA monitors the fees that are charged for these senior style mortgages to ensure that the loans afford the most reasonable fees. Senior property owners who are at least 62 may apply for this type of reverse mortgage assistance.
HECM Reverse Mortgage Assistance
The tax free money returned to homeowners through a reverse mortgage may be used to pay off bills, travel, or update the home for senior living. There are no restrictions on how the money is spent, and the homeowners make the decision to receive monthly payments, establish a line of credit, or take a one time lump sum amount. Retirement years are costly and many individual decide to use the equity in their home to live comfortably.
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