HECM Calculator

Reverse mortgage counseling

You need a required Reverse mortgage counseling session with a HUD-approved counselor before applying for a HECM. The counselor explains the loan, its costs and the other choices available to you.

No HECM can skip Reverse mortgage counseling: a lender may not take your application until you meet with a HUD-approved counselor. According to the FTC, agencies often charge around $125, which you can usually pay from the loan.

A counselor works for an independent agency rather than the lender. Before you sign anything, the counselor makes sure the loan and its other options are clear to you.

Who has to go, and when?

Every borrower must attend. A spouse not listed on the loan should attend too. An adult child or trusted friend may join you at many counselors' sessions. Your meeting can take place in person or by phone. Bring written questions if you want them.

The application must come after the session. When the session ends, the counselor issues a certificate. The lender needs this certificate to move forward. You owe the lender nothing if you later change your mind.

What the session covers

A HUD-approved counselor covers the same topics with every client:

  • when a HECM becomes due and how it works
  • mortgage insurance and origination, plus closing costs and interest
  • the growth of the balance and what heirs would get
  • the first-year limit and the ways to take the money
  • your duties: paying property taxes and insurance, maintaining the home and living in it
  • the effect on a spouse who is not listed on the loan
  • choices include selling, using a HELOC, seeking state tax relief or local programs
  • how Medicaid, SSI and other benefits can be affected by taking out a reverse mortgage

A good counselor will also work through the financial figures with you. Ask the counselor to check the figure that you bring from the calculator.

Does reverse mortgage counseling cost me anything?

Often, yes, but the amount is small. The FTC says the typical fee is around $125, though the cost may be higher. Most agencies allow payment from the loan at closing. If you cannot pay, HUD-approved agencies should not refuse counseling. When you book, ask about the fee.

Where to find HUD-approved reverse mortgage counselors

Only agencies that are HUD-approved and provide HECM counseling qualify. You can find them in two official tools:

Looking for reverse mortgage counseling near me? Under reverse mortgage by state, each state page lists its agencies that offer HECM counseling and gives their cities, methods and languages.

What to bring to the session

  1. Your latest mortgage statement, if any balance is still owed on the home.
  2. Your most recent property tax bill, along with your homeowners insurance bill.
  3. An approximate budget for one month, listing income, bills and debts.
  4. Any quote that a lender has already given you.
  5. A list of questions, plus someone you trust who listens with you.

Reverse mortgage scams counselors warn about

Counselors repeatedly encounter the same scams. Watch out for anyone who:

  • Describes a reverse mortgage as a government benefit or "free money"
  • Pressures you to purchase an annuity, insurance or an investment with the loan
  • Proposes home repairs funded through a reverse mortgage that the person arranges
  • hurries you, or tells you to avoid counseling or sign blank pages
  • Asks that you sign and transfer your deed or title to them
  • is someone who is a relative or helper and wants the money sent to them

You will find those warning signs in the FTC's reverse mortgage guide. Neither agency sells reverse mortgages: HUD and FHA do not sell these products. A legitimate lender will never tell you to keep counseling secret from your family.

Reverse mortgage complaints: where to take them

  • Start with the lender or servicer. Ask for a written description of the problem, then keep copies.
  • CFPB. It accepts complaints about mortgage lenders and servicers. Your rights are explained on its reverse mortgage pages.
  • Contact your state regulator. Mortgage lenders are licensed in every state. Each page for a state names its agency.
  • The counselor you use. A HUD-approved agency can also help with a servicer problem once closing is done.

Questions people ask

  1. Do you have to get counseling for a reverse mortgage?

    Yes, it is. Before applying, every HECM borrower must meet a HUD-approved counselor under federal law. Without the counseling certificate, the lender cannot accept your application.

  2. Which person is the best one to talk to about reverse mortgages?

    A housing counselor who is HUD-approved and offers HECM counseling. They work apart from lenders, and their pay stays the same if you take the loan or not.

  3. How can you find a HUD approved counselor?

    Pick an agency that lists reverse mortgage counseling, using HUD's counselor search or the CFPB's finder for counselors. State pages here also list them.

  4. Which reverse mortgage lenders does HUD approve?

    Lenders that make HECMs are required to be FHA-approved. The lenders page puts the lenders that closed the most HECMs at the top, based on HUD's twelve most recent months of data.

  5. What are the risks and problems with reverse mortgages?

    Scams and sales pressure. Counselors warn of people who push a product that the loan pays for or ask you to sign over your title.