The U.S. Department of Housing and Urban Development will be instituting major changes to the Reverse Mortgage program.
Changes taking effect this month, effective September 30, 2013 include:
- Limits to the amount of money that you can access in the first year of the loan
- A new mortgage insurance fee structure which may mean higher fees for some borrowers
- Lower loan amounts – experts estimate that total loan amounts will be about 15 percent lower after Sept. 30, 2013
- Instructions for setting aside money to be used to pay property taxes and insurance
An additional change will take effect, but not until January 13, 2013
- Borrowers who are assigned a case number after January 13, 2013 will be required to undergo a financial assessment. The assessment will include a credit history analysis, a cash flow/residual income analysis, analyzing compensating factors and extenuating circumstances and determining if the HECM applicant has the financial means to continue paying property taxes, insurance and other obligations.
These changes are significant and will take effect very quickly. If you are interested in a Reverse Mortgage, talking with a Reverse Mortgage lender immediately may work to your advantage.