Published by Brasch Financial. .
Before you take out a Home Equity Conversion Mortgage (HECM), you must complete counseling through a housing counseling agency approved by the U.S. Department of Housing and Urban Development (HUD). A HECM is a federally insured reverse mortgage. You can speak with a counselor while you are considering your options, before deciding whether to apply. CFPB counseling guidance, HUD HECM information.
For Arizona and California homeowners considering this type of loan, the appointment offers time to examine costs, household needs, and alternatives. Use the checklist below to organize that conversation. Counseling does not establish that a loan suits your situation or guarantee lender approval.
Prepare your questions and household notes
Before the appointment, write down your goals and the information you want help understanding. Useful notes include your current mortgage balance, household expenses, who lives in the home, and any plans to move. Keep lender proposals or written explanations available so you can ask about them.
This is a preparation checklist, not an agency's required document list. Ask the agency what to bring and whether it charges a counseling fee. Agencies must explain their fees before counseling and cannot charge you if you cannot afford to pay. CFPB reverse mortgage cost guidance.
1. Understand the upfront and ongoing costs
Ask the counselor to help you identify:
- Which charges you would pay at closing and which would continue afterward.
- How financing closing costs would affect the money available to you.
- How interest and fees could increase your loan balance over time.
A HECM can involve origination charges, third-party closing costs, and mortgage insurance. Request a written explanation of the proposed costs rather than treating the amount available to borrow as the amount you would receive. CFPB cost guidance.
2. Review the expenses you would still pay
You remain responsible for property taxes, homeowners insurance, and keeping the home in good repair. Ask how occupancy requirements apply and what could happen if you cannot meet these responsibilities. Failing to meet loan obligations can lead to repayment demands and put your home at risk. CFPB reverse mortgage overview.
Bring your estimated housing budget into this discussion. Ask how you would cover repairs or higher property expenses in addition to your other living costs.
3. Discuss your spouse, household, and future move
Describe who lives with you and who would borrow. Ask the counselor to explain how the proposed loan could affect a spouse or other household member if you die, sell, or leave the home for long-term care. Ask which protections have conditions and what your family would need to do.
Avoid assuming that someone can remain in the home under the same terms because they live there now. Get an explanation that addresses your household and the proposed loan. CFPB counselor question guide.
4. Compare how you would receive and use the money
Ask which payment options apply to the proposed HECM, how those options differ, and how any existing mortgage payoff would affect the funds available. Explain whether you want help with ongoing expenses, a specific cost, or a reserve for later. Ask the counselor to walk through the consequences of the choice you are considering. CFPB counselor question guide.
5. Consider alternatives before deciding
Discuss whether waiting, reducing expenses, moving, refinancing, or using another home equity product could meet your goal. Alternatives have their own costs, payment requirements, and risks. Comparing them does not mean you will qualify for each option. CFPB eligibility and alternatives guidance.
For background, read our reverse mortgage guide and home equity guide.
Leave with answers you can explain in your own words
Keep notes on the costs, ongoing responsibilities, repayment circumstances, and unanswered questions. Ask for clarification before making a decision. You can find HUD's counselor resources through its HECM information page.
To discuss Eric's mortgage services in Arizona or California, contact Eric. Use the marketing site for general questions; do not send Social Security numbers, account statements, or other sensitive financial documents through it.
This article provides general education, not personal financial, legal, or tax advice. Discuss your circumstances with appropriate advisers and a HUD-approved housing counselor.