HUD-approved reverse mortgage counselors

Before a lender can take your reverse mortgage application, you need a session with one of the HUD approved reverse mortgage counselors. The counselor doesn't sell loans and gains nothing from the one you pick. The fee typically runs about $125, and you're free to pick any approved agency, even one in a different state that counsels over the phone.

• What it costs: usually about $125
• When you do it: before a lender can accept your application
• Who has to be there: you, a spouse who isn't on the loan, and anyone else who owns the home
• Age requirement: the youngest person borrowing has to be 62 or older

Who needs to be counseled, and when

This requirement comes from federal regulation 24 CFR 206.41. It applies to the HECM, the federally insured reverse mortgage that most people are talking about when they use the term. At least one borrower, the youngest, has to be 62 or older.

The regulation says the lender must give you the names of HUD-approved HECM counselors at your first contact. Your counseling session then needs to be done before the lender is allowed to accept your application. Everyone with an ownership interest joins in: you, a spouse who won't be a borrower, and anyone else who owns the home.

What topics does the counselor cover?

You'll cover 4 key areas in the session: the loan's costs, the payments you're still responsible for, what becomes of a spouse once you pass away, and other options for getting money out of your home.

When it comes to costs, expect to hear the main numbers. According to the Consumer Financial Protection Bureau, upfront mortgage insurance runs 2% of the home value HUD recognizes, plus a yearly fee equal to 0.5% of the amount you owe. The origination fee, what the lender charges to set the loan up, is capped by federal rule at 2% on the first $200,000 of the home's value plus 1% on anything above that, with a $2,500 floor and a $6,000 ceiling.

Picking the agency and covering the fee

The choice of counseling agency belongs to you, not your lender. That's important, since the counselor has nothing to gain from whatever loan you end up with and doesn't sell loans at all.

Expect to pay around $125 in most cases. Should you move forward with the loan, that fee can come out of the loan proceeds at closing.

Finding reverse mortgage counseling in your state

The numbers below cover every agency office HUD lists for reverse mortgage counseling, drawn from HUD's housing counseling agency search. Because plenty of agencies counsel by phone, they can work with you no matter where you live, so the offices in your state aren't your only option.

• 17 agencies: California
• 16 agencies: Florida
• 14 agencies: New York
• 9 agencies: Illinois, Texas
• 8 agencies: Georgia, Minnesota, North Carolina
• 6 agencies: Colorado, Massachusetts, Virginia
• 5 agencies: Arizona, Maryland, New Jersey, Oregon, Pennsylvania
• 4 agencies: Idaho, Michigan, Ohio, Wisconsin
• 3 agencies: Missouri, Montana, South Carolina, Utah, Washington
• 2 agencies: Arkansas, District of Columbia, Nevada, Tennessee, West Virginia
• 1 agency: Alabama, Connecticut, Indiana, Iowa, Kansas, Maine, New Mexico, Oklahoma, South Dakota, Wyoming
• Phone counseling only: Alaska, Delaware, Hawaii, Kentucky, Louisiana, Mississippi, Nebraska, New Hampshire, North Dakota, Rhode Island, Vermont

What if there's no counseling office in your state?

Counselors are still within reach. The states without a HUD-approved reverse mortgage counseling office are Vermont, Rhode Island, North Dakota, New Hampshire, Nebraska, Mississippi, Louisiana, Kentucky, Hawaii, Delaware and Alaska. Your options are to work with an out-of-state agency by phone, look through HUD's agency list, or use the Consumer Financial Protection Bureau housing counselor search.

Getting ready for your session

Three things are worth having on hand: a ballpark figure for your home's value, the balance left on your mortgage, and your annual property tax and insurance costs.

Already gotten quotes from reverse mortgage companies? Bring them along. The counselor gains nothing from which company you pick.