Important Changes to the Reverse Mortgage Program for Fresno, CA
If a Reverse Mortgage is something that you have been considering then it is important for you to educate yourself on the changes that are being made to the program. On September 3rd HUD issued a mortgagee letter outlining what the new Reverse Mortgage program will look like.
Effective September 30th there will be a reduction in the principle limit (the amount of funds available to the borrower) the reduction can be up to 15% however, it does vary depending on the age of the youngest borrower.
Another change that is being made to the Reverse Mortgage program is a 60% cap on what the borrower is allowed to access within the first year if they do NOT have mandatory obligations such as a current mortgage to retire. After one year the borrower then has access to the full principle limit amount.
Going further, if the borrower does not have mandatory obligations and therefore utilizes less than 60% of the max cash available in the first year then the mortgage insurance premium will be 0.5%. On the flip side to this, if the borrower has a large mortgage balance to pay off and exceeds the 60% then the mortgage insurance premium goes up to 2.5%.
The mortgagee letter issued by HUD also stated that there will be implementation of financial assesment to be in effect by January 1, 2014. Financial assesment will be performed in order to determine residual income analysis as well as credit history analysis.
If you are located in the Fresno, CA area and have been considering a Reverse Mortgage then I encourage you to call me and allow me to meet with you and educate you on how these changes to the Reverse Mortgage program may affect your specific circumstances.