With all of the changes in the reverse mortgage industry lately, it can be stunning when researching lenders and products. It is important to know that even with the decisions of Wells Fargo and Bank of America to exit the reverse mortgage business, there remains a core group of lenders that use 100% of their resources to deliver reverse mortgages to borrowers over age 62, nationwide.
These lenders are an elite group of banks that specialize in reverse mortgage lending and have vast experience with these loans. While other banks are pulling out, these lenders keep growing and expanding and making reverse mortgages more affordable than ever.
There are more changes on the horizon for the reverse mortgage program and no matter which lender you choose, they will all be bound by new rules and regulations. For instance, we are expecting a new element to be added to the qualifications for reverse mortgage applicants. For some time now, HUD has been trying to address tax delinquencies and the most obvious way to do so would be to establish a minimum income requirement for all new reverse mortgage borrowers. Currently, there is no minimum income requirement for new applicants.
Another adjustment comes in the form of an expiring extension on lending limits. The current reverse mortgage lending limit is set at $625,000. This higher limit allows homeowners with larger mortgages (and more expensive homes) to qualify for the relief. If Congress deems appropriate, the extension will expire and the limit will revert back to $417,000 in September this year.
One final note is the now complicated reverse mortgage counseling process will lose government funding and in most, if not all instances, become another costs associated with the loan. Currently there are several HUD approved agencies that provide this counseling at no charge to the borrower and HUD does not allow the lender or any third party to pay the cost of counseling on the borrower’s behalf.
If you are considering a reverse mortgage, now may be the time. I usually don’t write about urgency when it comes to reverse mortgages because it’s always a good idea to take your time and understand the process completely but I can refer to a quote from the Wall Street Journal where Barbara Stucki, vice president for home-equity initiatives at the National Council on Aging, a Washington-based advocacy group said about reverse mortgages, ”The good advice is to do it this summer.”
Michael Manfredi is a Reverse Mortgage Specialist in Phoenix, Arizona
Reverse Mortgage Concepts
Phoenix, AZ 85020
(602) 456-0009
(888) 697-5556
If you enjoyed this article, please consider sharing it!
