New Financial Assessment Will Make Reverse Mortgages Harder, Not Impossible
February 2, 2015 – New changes to reverse mortgages will begin March 2nd*, which will now add an additional step to the application process for borrowers. A financial assessment will be now put into place, which will help determine if the borrowers are able to meet the obligations of the loan. Previously, borrowers who applied for a reverse mortgage were not required to undergo a financial assessment
The implemented financial assessment will have the lenders looking at the following information:
- Credit history using credit reports from all three national credit bureaus.
- Income (including retirement accounts, Social Security, etc.)
- Payment history on property taxe and home insurance.
- Debt; including medical bills and credit cards.
The financial assessment has been created to help protect reverse mortgage borrowers and is not meant to disqualify a borrower from the loan. This new financial assessment offers the opportunity for lenders to determine if a set-aside is needed. However, some potential borrowers may be intimidated by the implementation of the financial assessment, this new step should not be looked as a “yes” or “no” answer to your qualification for a reverse mortgage. This new step will provide further protection for borrowers in a reverse mortgage with the set-aside.
While the new financial assessment begins March 2nd, 2015 – borrowers are still able to apply for a reverse mortgage without having to go through the new, additional step. If you are interested in a reverse mortgage, contact our Senior Advisors at 1-888-808-8486.
* Editor’s notes: The financial assessment has since been postponed to April 27th, 2015.
Image courtesy of [suphakit73] / FreeDigitalPhotos.net
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