Reverse Mortgages to be more restrictive

Congress recently gave the Federal Housing Authority (FHA) the ability to make sweeping changes to the HECM reverse mortgage program. This could mean fewer borrowers will qualify and receive less money.

These restrictive changes will likely begin October 1. If you are considering a reverse mortgage for the near future, now is the time to act. Those who complete counseling, submit an application and receive a case number by October 1 will receive more money with the current prothe gram. Time is of the essence.

A reverse mortgage is a loan that enables homeowners 62 or older to borrow against the equity in their home, without having to give up title or take on a monthly mortgage payment. The money received can be used for any purpose. The loan amount depends on the borrower’s age, current interest rates and the value of the home. Homeowner must remain current on property taxes and insurance.

A reverse mortgage does not have to be repaid until the borrower sells or moves out of home permanently, and the repayment amount cannot exceed the value of the home. After the loan is repaid, any remaining equity is distributed to the borrower or the borrower’s estate.

For more information, please call David Chee, NMLS ID #263222, Branch Manager and Certified Public Accountant at Security 1 Lending, (800) 967-3575. Loans will be made or arranged pursuant to California Department of Business Oversight Residential Mortgage Lending Act License #4131074.