Beneficial Program Changes for Seniors
There has been some program changes in a reverse mortgage that have made it even more beneficial for its borrowers. Senior Help Line provides senior homeowners with the solution to their financial obligations.
Three Basic Changes to Reverse Mortgage:
1) First Year’s Limit – The Department of Housing and Urban Development (HUD) has reestablished a new way of distributing proceeds by making it available in two segments. Borrowers should now have access to a specific portion of the total sum of proceeds they are eligible for within the first year followed by a wait of 354 days after closing. Based on the program that a borrower chooses to go with, they may be able to access up to 60% of eligible lump sum amount or the total of the mortgage that they are entitled to with possibly an additional 10%.
2) Spouses – On August 4th a new rule will apply allowing a borrower’s spouse to be able to stay in the home without any issues with foreclosure just as long as taxes, insurance and the maintenance of the home is kept up.
3) Changes in Fees – Along with other basic changes there was also a change in the upfront fee for a Standard Reverse Mortgage of 2% and 0.01% for the Saver Reverse Mortgage. These fees are now changed to 0.5% to 2.5% based on the size of the loan and how much a borrower is able to put upfront, paying off an existing mortgage may make a big difference as well too. The benefit of this new change is that you may be able to customize the program to fit your current situation.
Benefits of a Reverse Mortgage Loan are but are not limited to:
One of the biggest reasons why HUD has made these changes is so that the program may result in a more promising outcome for seniors in the future. It wasn’t until last year that HUD was able to try and enforce these changes and employ a new guideline for the Reverse Mortgage program. With these changes in effect, HUD now is able to better monitor the program itself and ensure that its senior borrowers are able to benefit from the program and make changes to the program for the future if needed.
Jessica Lucas
