While some things never change, the opposite is true for the Reverse Mortgage program during the past few years.Even though there has been considerable debate about the abundance of changes to the program, the consensus is that these changes have resulted in a strengthened program and allows borrowers to be further protected.
On the immediate horizon of change to the Reverse Mortgage program, is the HUD Financial Assessment. For Baby Boomers contemplating Reverse Mortgages both now and in the future, these new rules will transform and enhance the program even further. Borrowers, prior to application, will have a clear picture of their current financial situation and how it will change as a result of using a Reverse Mortgage for retirement planning or other financial goals. This is change that is definitely for the better.
From a Borrower’s and an Originator’s point of view, the new rule is both a challenge and an opportunity. The challenge for the borrowers would be presenting more information, questions and paperwork up front, and resulting in longer presentations and further borrower education for the Loan Originators. Ultimately, the opportunity is invaluable and worth the challenge as it produces increased clarity and certainty that a Reverse Mortgage is the right long-term choice for the Borrower. It’s a sustainable decision that the homeowner can rely on to serve them well, accomplish their goals, and also gives the Loan Originator a feeling of truly serving the needs of their client.
An additional benefit of the financial assessment is the choice to bring your advisors into the decision making process. Whether it be family, mentors or professionals that you have relied on for guidance over the years, don’t be reluctant to include them in the equation. A Reverse Mortgage can be a powerful tool in financial planning. While it may not be for everybody, it can be perfect for some--even financial planners and investment advisors are quickly discovering its tremendous value.
The bottom line is that this financial assessment is not a pass-fail. Unlike in the forward market, it won’t cause a denial but rather, it will simply determine whether or not the borrower will need a "set-aside" payment for future property taxes and homeowners insurance. Think of it as the “New, Improved Reverse Mortgage”--A safer, more attractive option for all prospective consumers who are considering using their home equity in planning their retirement.
For more information on Reverse Mortgages, refinancing or on a home purchase contact us at www.ARAMCO.biz or call 877-700-0942.