New reverse mortgage program changes will create new hurdles for cash-strapped seniors looking to draw on their home equity during retirement, according to an article from Reuters.
A major hurdle borrowers will face stands to be less proceeds from their reverse mortgages under the new program changes, which will take effect next week on October 1, 2013, notes the article.
While the deadline draws nearer until the program changes take effect, some homeowners have been able to lock in reverse mortgages and access more of their home equity than they would under the new changes.
The article references a woman who used a reverse mortgage on her California home in 2011. After refinancing one summer to obtain more cash, under the pending rules the amount she would have been able to take out would have been cut by 15%, that is, assuming her application qualified under the new financial assessments.
Less proceeds could also make reverse mortgages less appealing for a “vast number of seniors,” writes Reuters.
Written by Jason Oliva
