Reverse Mortgages NY and NJ Update

Reverse mortgages in NY and NJ, as well as the rest of the country are under going many changes.

Reverse Mortgages NY & NJ Update:
Seniors who may be considering a reverse mortgage need to quickly get educated on the new rules for reverse mortgages. Some of the new rules have resulted in a reduction of around 15% of the principal limit., funds made available prior to closing costs. Another rule called the 60% rule will determine the % for MIP, mortgage insurance premium. The MIP is factored in as an upfront closing cost, as well as a yearly premium. There is much to understand when discussing the 60% rule and MIP.

In addition to those rule changes, a really big change is just around the corner. On January 13, 2014, HUD, Housing and Urban Development, has mandated an asset test aka a debt to income ratio, to take effect for FHA, Federal Housing Administration, HECM, Home Equity Conversion Mortgages, aka governments reverse mortgage program. Once this takes effect many people will not qualify. This is both good and bad. If a person were to take out a reverse mortgage, and they were not able to continue to pay their real estate taxes or┬áhome owners insurance they would be in default, which could lead to a foreclosure. To prevent this an asset test was needed. The question yet to be determined is what will the new debt to income ratio be. A few years ago one of the big investors in the reverse mortgage arena implemented a similar asset test for 30 days. Originally when they implemented it, it was that investors/lenders rule on top of the HUD mortgagee letter rules, and it was not introduced as a 30 day test. Many folks did not qualify during that 30 day period. I believe that is why they did away with that test, however I’m not 100 % sure that is why they discontinued it. Fast forward the new HUD, rule will take effect on January 13, 2014. In addition to R.E. taxes, home owners insurance and an energy cost factor that was part of that previous lenders asset test , the new test or ratios will also take in to consideration revolving credit card debt, car loans, student loans, other liens like vacation homes.

For many senior homeowners trying to get reverse mortgages in NY and NJ where real estate taxes may be high, approval may be difficult.

If you would like more info on reverse mortgages in NY or NJ, please give me a call.

 

submitted by:

Annette Fisher,CSA

Certified Senior Advisor

Reverse Mortgages NY NJ

NMLS 67606

347-291-7479

Fort Funding Corp.

NMLS 39463

Corporate Office:

7016 Fort Hamilton Pkwy

Brooklyn NY 11228

 

 

Reverse mortgages NY, Brooklyn, Queens, Staten Island, Bronx, Nassau County, Suffolk County, as well as, other NY an NJ areas.

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