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Reverse mortgages will be more difficult to qualify for after March 2, 2015
In March of this year, new reverse mortgage rules are due to take effect that will impact the eligibility for seniors.
A reverse mortgage is a loan that allows a homeowner to access funds against the equity in the individual’s home. Currently a person is eligible to take out a reverse mortgage if they are 62 years of age or older.
The reverse mortgage does not have to be repaid until the individual moves from the premises, sells the premises, or passes away. The homeowner must continue to pay property taxes and homeowners insurance premiums after obtaining a reverse mortgage. Currently any individual 62 and older who does not already have a mortgage on his or her home is allowed to take out a reverse mortgage.
But, effective March 2, 2015 homeowners will now have to pass a financial assessment before they can take out a reverse mortgage. The financial assessment confirms the applicant’s ability to pay the property tax and insurance premiums on the property through an assessment of income and credit histories. This new rule applies to reverse mortgage loans under the Home Equity Conversion Mortgage (HECEM) program.
If you do not meet the financial requirements for the loan or the credit requirements, and do not have enough income, there still may be options available to assist in obtaining the reverse mortgage loan. A real estate attorney can help you evaluate whether a reverse mortgage makes sense for you or not, and then we can help you find a reputable reverse mortgage lender. We will make sure that it fits in your overall estate plan.
By Eric J. Einhart – Guest Blogger