Choosing a Consultant for Reverse Mortgage Price Counseling
Counseling for Reverse Mortgages is Advisable or What Your Reverse Mortgage Counselor Should Do For You
As reverse mortgages grow more and become more popular, the major concern of the US government is protecting seniors from the repercussions of a bad decision. This is one reason why the American government requires all reverse mortgage applicants to take credit counseling before their loan can be processed.
Membership-based organizations including the AARP have counselors whose job is to help senior citizens find their way through reverse mortgage loan industry. The good thing is that the counseling is offered free of price to members.
Most people think credit counseling is just a waste of time. However, the fact is that without adequate information, you’re bound to make the wrong choices. A wrong choice is the price that senior citizens cannot afford at this stage of their life. It is therefore very important to get counseling from a trained consultant regardless of the price.
So what can you expect from a reverse mortgage counselor?
- Information. Your reverse mortgage consultant will not overload you with useless information. Rather, he or she will make you understand everything about reverse mortgage loans and how they work.
- Your individual situation. The consultant will also explore your individual situation. You will be guided which reverse mortgage process is best for your situation.
- Benefit versus trade-off. Knowing the pros and cons, benefits and disadvantages of a reverse mortgage is not easily understood. This is why you need to talk to a credit counselor. The most important question you can ask your counselors as part of your FAQ: How will this loan affect my finances?
- Planning for your estate. Not all seniors who take out a reverse mortgage loan are desperate for money. In fact, many of them are wealthy individuals who are planning their estate so can leave something for their heirs. A good credit counselor can give you advice on this.
If you think you’re already ready for a reverse mortgage loan, then go right ahead. A reverse mortgage is really just an ordinary mortgage, except that the loan is not paid if the borrower still lives in the house. It can only be paid when the borrower dies or when he or she moves out of the house. You can get your reverse mortgage money in three ways: a lump sum, monthly payouts, or a line of credit.
The good thing about reverse mortgages it is an industry regulated by the Department of Housing. Reverse mortgage lenders also have their own internal controls with the National Reverse Mortgage Lenders Association (NRMLA).
NRMLA is a trade association that holds lenders accountable for their reverse mortgage practices. Representing lenders and investors, the NRMLA does a lot of things, including:
- Providing education about reverse mortgages,
- Training reverse mortgage lenders to be more sensitive to the needs of America’s seniors,
- Developing best practices within the industry, and
- Enforcing a code of conduct among reverse mortgage lenders.
There are many reverse mortgage programs on the market today. But the most popular of these is the HECM program. This program is administered and insured by the Department of Housing and Urban Development.
Seniors who are considering reverse mortgages are advised to consult with their family members so it doesn’t surprise them when they start dealing with inheritance. They should also seek one or more professional loan counselors for reverse mortgage counseling, this can all be done at a relatively affordable price.