Why does a reverse mortgage counselor advise me not to get the loan? Can I go against the wishes of my counselor? Who gives reverse mortgage counseling?
A reverse mortgage counselor is instructed to review several contingencies prior to recommending a reverse mortgage. They must verify if the applicant(s) qualify under the federal guidelines first, and foremost. Next they must consider all financial implications of the mortgage. This will include if the costs associated with a reverse mortgage, the amount available to the borrower and any tax consequences associated with the transaction. This is a fail safe measure that is meant to make sure the borrower understands the entire process. If the reverse mortgage will not benefit the borrower, they may recommend other options for financial stability.
Can I go against the wishes of my counselor?
While advice from a financial counselor is strongly advised to be used, you can still apply for a reverse mortgage even if you are discouraged not to do so. The credit counseling is used so the consumer can understand all the aspects of the transaction. Consumers should heed the advice of the counselor if possible. Many times the costs associated with the reverse mortgage far outweigh the benefits that the recipient will receive. Another common issue is inheritance. If it is mandatory that the heirs receive the home, reverse mortgages may not be the right choice.
Who gives reverse mortgage counseling?
You can receive counseling from any HUD approved counseling agency. There are also other agencies offering this service that are not affiliated with HUD. National counseling agencies such as the Council on Aging, Consumer Credit or many other non profit organizations qualify for reverse mortgage counseling. Counseling is required for any reverse mortgage transaction. If you are going to apply for a reverse mortgage you should seek out the assistance of a credit counselor prior to starting the application process.
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