Our thanks to the NCLC National Consumer Law Center for their timely reminder about a change coming to the reverse mortgage program “rules.”
0 Comments
A June 2015 change of regulation governing reverse mortgages (Department of Housing and Urban Development (HUD) and Federal Housing Authority (FHA) ) effectively allows lenders to permit a surviving, non-borrowing spouse to remain in the home, postponing loan repayment until the surviving spouse moves or dies. To qualify, the original reverse mortgage must have been approved by the Federal Housing Administration prior to August 4, 2014, and the property tax and insurance payments must be up to date. Numerous other conditions must also be met.
Check with you financial advisor about the specifics of reverse mortgages in your personal situation. Free information about reverse mortgages is available from HUD and counseling is also available. On the website www.hud.gov there is a reverse mortgage calculator and a Frequently Asked Questions section. Reverse mortgages are not suitable for every family situation. Make sure you have all the current facts. The rules governing reverse mortgages are complex and there could be a long-term impact on your Estate Plan. Know how those regulations could impact you; your spouse and your loved ones/heirs. Rules governing reverse mortgages have changed since their inception; have been modified as recently as this year, and in all probability will continue to be 'fine-tuned'. Currently, the only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender. Another source of information is www.consumeraffairs.com and AARP. Remember to read everything before signing anything. Compare the costs of a reverse mortgage to other alternatives, for example down-sizing to a smaller home or moving to a less expensive state. If you are uncertain, have documents reviewed by your legal advisor. Some Special Situations to consider: You and your spouse both took out a reverse mortgage: when your spouse dies you will want to move You currently owe more than your home is valued You (or your spouse) are in poor health Only your spouse took out the reverse mortgage Your income will severely diminish upon the death of your spouse You are in a same-sex relationship Your spouse is much younger (or older) than you Your NEW spouse has a reverse mortgage (taken out prior to your marriage) and now you both live in the property You plan to leave the property to your heirs You own a property that is high value You plan to move to another state in the future You may not wish to maintain your home in the future and are considering down-sizing You want flexibility about where you live - for example, moving closer to other family members Keep in mind that a reverse mortgage is a legally binding financial document. Make sure you fully understand every detail before signing. “Working To Preserve Your Wealth and Protect Your Future…in a Constantly Changing World” Please read my full disclaimer and “How I Can Help You” Visit my website: www.attorneybarbaradalvano.weebly.com for my blogs, infographics and bio |
AuthorBarbara Ann Dalvano, Esq. has been practicing in the estate, trust, business and tax planning fields of law for over 30 years. She is the author of the "Sticks & Mortar, Grounded in the Law" Blog. Archives
September 2022
Categories
All
|