Reverse Mortgage Changes
Tuesday, 07 September 2010 10:11
The FHA may lessen the upfront cost of reverse mortgages, but they may also be reducing the amount that seniors can borrow from their homes. FHA officials have stated that they are finalizing plans to offer a HECM with almost no premium attached, and they may change the original product to increase overall borrowing costs. Essentially, they are looking to make the product desirable, while lessening their risks.
HECMs will be split into two products: the standard loan and a saver loan. This will most likely increase the demand for the product, but will also provide for some pitfalls. If there are more options, seniors are more likely to be talked into something that they don’t understand. It is recommended that anyone interested should talk to a counselor before going to a lender.
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