More and more baby boomers are finding out that their retirement strategies are falling short due to the rising costs of living expenses. Nowhere is this more evident than Palm Beach County. Luckily, with home values rising, baby boomers are finding that a HECM mortgage can help provide a safety net. Reverse Mortgages allow seniors 62 and older to use the equity in their home to set up an equity line for future expenses.
A Home Equity Conversion Mortgage allows you set up an equity line of credit on your primary residence. It has several advantages over a traditional equity line of credit.
- There are no monthly mortgage payments to make.
- The equity grows over time, using a growth rate that is tied to the libor index.
- In most cases, it can be much easier to qualify.
Even though it is much easier to qualify for than a traditional equity line of credit, the qualification process has recently got much more difficult. HUD has made several recent changes to the qualification guidelines. The biggest change is the financial assessment component. Now, if it is determined that a borrower is struggling to meet their financial obligations, the lender is required to hold back some of the proceeds. The funds are help in an escrow for future property taxes and homeowner’s insurance expenses.
Although the changes can make it tougher to qualify, they help make assure that the borrower’s total housing expenses are taking care of. Reverse Mortgages have for a long time had a bad rap, partially due to some borrowers that have fallen behind on their homeowner’s insurance and property taxes. And in the end may, this can result in foreclosure. Now with the changes, this should help eliminate this event from happening.
The amount you can qualify for depends on the value of the property and the age of the youngest borrower. Group One Mortgage is an FHA Approved Lender in Palm Beach County. If you would like to find out more about your visit us our website at LocalReverse.com connect with a local specialist.