Issue 32 & 33.14
In looking at options for financial health and wellbeing going into our retirement, HUD has announced the new changes that will benefit our senior clients beginning in August.
Besides adding some more flexibility to the loan with loan terms and options, they have improved the loan in two significant ways that will open up the option to more of our senior clients that are wanting to buy a home or simply eliminate their current mortgage payments for life.
Two significant changes are the following:
HUD or FHA will now begin insuring both husband and wife for life with no mortgage payments as long as either spouse is over 62. Never before in history has HUD insured both spouses unless both were over 62, and now they will. So, as long as you are married and one of you are over 62, then both husband and wife will be protected in the home for life with no mortgage payments. In the past, if I had a client that was 62 and he was married to a spouse that was 58, then they would not be able to get a reverse loan. You could not buy a home for roughly half the price and have no mortgage payments for life, or you would not be able to stop making mortgage payments on your current home unless you and your wife were both over 62. Now you can. As long as either one of you are over 62, you can take advantage of the reverse loan to purchase a home or to refinance your current home and have no mortgage payments for life.
Secondly, they have increased the loan limits to allow less of a down payment or a higher loan amount in order to pay off the existing mortgage, especially if you are over 70. The older we are, the more of a benefit or improvement in the current loan scenarios. This will allow older clients to purchase a home for a lot less money than previously needed. If you are in your current home and you are older than 70, it allows more of a loan amount that might be able to pay off your current mortgage now when it would not before because of the lower lending amount.
Today, more than ever, talk to your senior mortgage planner and or financial advisor about the new loan options and changes with the reverse mortgage. With the exciting changes, it opens more options, but there are always pros and cons with financing and so your planner will need to make sure you review all of your options and make sure that your financing matches your long term financial plans.
Brandon Hansen is Senior Mortgage Banker and Registered Investment Advisor Representative for Cherry Creek Mortgage/Investment Advisors International and can be contacted at 435-668-2840/435-674-9200, or visit the website at www.cherrycreekutah.com