NEW YORK (MainStreet) — One of the greatest things about reverse mortgages, as everyone surely knows, is that you need no steady income to qualify. Why would you, since there are no monthly payments? This feature makes a reverse mortgage a great option for late in life, when other assets are dwindling.
Well, it's not quite so simple — not anymore. Starting March 2, borrowers will have to show they have the resources to keep up with property taxes and homeowner's insurance premiums. Applicants who are tapped out could be rejected, and others with resources deemed insufficient could find a big chunk of their loan earmarked for these expenses, reducing their money-managing options.
To be on the safe side, homeowners who had thought a reverse mortgage could someday provide a safety net should review their strategy to figure just how they'd pay taxes and premiums.
Read More: How to Weave a Reverse Mortgage Into Your Retirement Plan
The Federal Housing Authority imposed the new rules several months ago to curb the growing number of reverse mortgage borrowers who default by not paying property tax and homeowner's insurance premiums. Starting March 2, lenders will have to assess applicants' debt burdens, credit ratings, payment histories, income from Social Security and other sources.
read more: http://www.mainstreet.com/article/reverse-mortgage-rules-become-more-like-regular-mortgages-in-march
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