Don’t freak – but do take note: big changes afoot
Posted on August 31, 2017
Laurie MacNaughton [NMLS ID#506562] © 2017
I am not an alarmist. I do, however, believe forewarned is forearmed.
This week FHA announced some of the most sweeping changes ever made to its reverse mortgage program: starting October 2, 2017 FHA’s reverse mortgage loan amounts will decrease, and most new reverse mortgage applicants will see higher upfront FHA mortgage insurance.
What does this mean? First and foremost it means that if your client, friend, or family member is looking into a reverse mortgage, now is the time to consider moving forward.
Though it will likely take years to assess the true impact of this week’s announcement, this much is apparent now: if a homeowner just barely qualifies under current guidelines, he or she may be ineligible under the new guidelines. Future applicants with little or no mortgage debt will see notably smaller lines-of-credit than they would have under current guidelines. It also means thousands of homeowners will be scrambling to get a place in line for their mandatory FHA reverse mortgage counseling.
NOTE: Loans already established, and those with FHA case numbers dated on or before October 2, 2017, will not be impacted by the changes announced.
History will be the judge as to whether these changes were wise. But one thing is certain: if intentions are to “some day” look into a reverse mortgage, that day has arrived.
If you would like to gather more details, give me a call. I always love hearing from you.