Reverse-Mortgage Rules Changing: Why Fewer People May Qualify Next Year
Just because you qualify for a reverse mortgage now doesn’t mean you will next year, according to the Smart Money retirement blog Encore. That’s because the government’s changing the rules.
In the past, the amount a borrower received was determined by his or her age and property value, says Peter Bell, president of the National Reverse Mortgage Lenders Association. But on Oct. 5, the Federal Housing Administration, which insures virtually all reverse mortgages, told lenders that they are also free to consider a borrower’s “financial capacity and credit assessment criteria … in the origination and approval of” reverse mortgages. …
According to the post, “New Barriers To Reverse Mortgages,” the government may start not just allowing but requiring this process next year.
Of course, this doesn’t necessarily mean you should run to the bank to take out the loan. Experts recommend considering the pros and cons of reverse mortgages carefully. These previous OurParents posts may help:
- Considering a Reverse Mortgage? Why Required Counseling May Not Be Enough
- 3 Things You May Not Have Heard About Reverse Mortgages
- “I Don’t” Recommend Reverse Mortgages, Says Financial Analyst
- Why a Reverse Mortgage May Not Fit Your Future: What to Consider
- Experts Warn Against Ill-Advised Reverse Mortgages
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Leigh Ann Otte is a freelance writer who specializes in health and aging issues. She covers finding and paying for senior care for OurParents.
