Reverse Mortgage Counseling

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What is a Reverse Mortgage?

Reverse mortgages allow homeowners aged 62 or older to convert home equity into cash while living in the home; allowing them to enjoy their home for as long as they live there. Borrowers continue to own their homes and are not required to make monthly payments. Proceeds from the reverse mortgage can be received in a variety of different ways: lump sum, line of credit, or monthly payments.

Simply put, a reverse mortgage is a home loan that provides cash payments based on home equity. Homeowners normally “defer payment of the loan until they die, sell, or move out of the home.” Upon the death of homeowners, their heirs either give up ownership to the home or must refinance the home to purchase the title from the reverse mortgage company.

Application Requirements

  • Be at least 62 years of age or older
  • Own the property and have a small mortgage balance, if any
  • Occupy the property as your principal residence
  • Be current on any federal debt
  • Borrower is required to pay property taxes, hazard insurance and homeowner dues, if applicable; and
  • Participate in a counseling education session provided by a certified reverse mortgage counselor

Mortgage Amount Based On

  • Age of the youngest borrower;
  • Current interest rate; and
  • Lesser of appraised value or the HECM FHA mortgage limit of $625,500. (Borrower with mortgage limits above this amount should consult with their lender)

Financial Requirements

  • Borrowers are required to complete a financial assessment with their lender
  • Lender will review income, credit report and residual income
  • Life Expectancy Set Asides (LESA) may be required to pay the property taxes, insurance and/or homeowner dues
  • No repayment as long as the property is your principal residence; and
  • Closing costs may be financed in the mortgage

Property Requirements

  • Single family home or a 1-4 unit home with one unit occupied by the borrower;
  • Own the property outright or have a small mortgage balance;
  • HUD-approved condominium; and
  • Manufactured home that meets FHA requirements.

In preparation for your counseling session all borrowers should review the following documents. Write down any questions you have so you can be prepared to ask your counselor during your session. If you have family members or trusted advisers (lenders are not allowed) that you would like to attend, please have them available during your scheduled appointment time.

Reverse Mortgage FAQ

Reverse Mortgage Booklet

Preparing for your Counseling Session: HECM Handout


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Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.


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