CBS News: Reverse mortgages may be ready for a revival
CBS MoneyWatch reports that, “reverse mortgages can provide a way for many Americans to fund a comfortable retirement and may grow in popularity as millions of baby boomers enter their golden years.” According to a June 2 article by CBS News writer Aimee Picchi, Bankrate chief financial analyst Greg McBride told CBS MoneyWatch, “The reverse mortgage is going to be a lifeline for millions of retirees in the years to come… In large part that’s because people may not have enough saved in their 401(k) plans or IRAs, and the bulk of their wealth may be tied up in the equity in their home. The reverse mortgage becomes the avenue to access those funds.” Read the full article.
This material is not from HUD or FHA and has not been approved by HUD or any government agency.
FAReverse LLC i/l/t/n Finance of America Reverse LLC is Licensed Mortgage Banker in the State of New York, but this website has not been approved by the New York State Department of Financial Services. Until this website is authorized by the New York State Department of Financial Services, no mortgage loan applications for properties located in New York can be accepted through this site.
When the loan is due and payable, some or all of the equity in the property that is the subject of the reverse mortgage no longer belongs to borrowers, who may need to sell the home or otherwise repay the loan with interest from other proceeds.
FAR may charge an origination fee, mortgage insurance premium, closing costs and servicing fees (added to the balance of the loan).
The balance of the loan grows over time and FAR charges interest on the balance.
Borrowers are responsible for paying property taxes, homeowner’s insurance, maintenance, and related taxes (which may be substantial). We do not establish an escrow account for disbursements of these payments. A set-aside account can be set up to pay taxes and insurance and may be required in some cases. Borrowers must occupy home as their primary residence and pay for ongoing maintenance; otherwise the loan becomes due and payable. The loan also becomes due and payable (and the property may be subject to a tax lien, other encumbrance, or foreclosure) when the last borrower, or eligible non-borrowing surviving spouse, dies, sells the home, permanently moves out, defaults on taxes, insurance payments, or maintenance, or does not otherwise comply with the loan terms.
Interest is not tax-deductible until the loan is partially or fully repaid.