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How the SOFR Index Affects Reverse Mortgage Rates

August 25, 2021     2 comments

For several years, adjustable rate reverse mortgages used a variety of indexes which determine a benchmark interest rate that when added to a margin set by the lender, would determine the final interest that borrowers would accrue on their loan. The rules for the choice of an index is that it had to be out of the lender’s control and had to be a readily published rate. LIBOR history and adaption  Some of the more common indexes over the years include the U.S. Prime Rate, the various... Read Full Article

HECM-to-HECM Refinance ‘5-Times’ Benefit Rule Explained

August 25, 2021     8 comments

For some existing reverse mortgage borrowers – particularly borrowers who have a Home Equity Conversion Mortgage (HECM) sponsored by the Federal Housing Administration (FHA) – a number of factors may lead them to ask if it is both possible and/or beneficial to potentially refinance their existing loan into an offering with more advantageous terms. The short answer to this is yes, it is possible to refinance a HECM reverse mortgage. Refinancing can come with several possible benefits, including increasing the amount of money that you’re able to borrow from the... Read Full Article

NOVAD Reverse Mortgage Problems – Please Help!

August 25, 2021     126 comments

ATTENTION: This website is NOT affiliated with Novad. To contact Novad servicing, call HUD’s FHA Resource Center at  (877) 622-8525 My mother passed in Oct. of 2018 in a nursing home. Prior to her death as POA I surrendered the home by registered letter to Novad, a HUD management company, requesting a Deed in Lieu of Foreclosure. As of March 2020 they have not taken over the title to the home and the tax collector is trying to get "The Estate of..."to pay the taxes and the estate has no funds... Read Full Article

Reverse Mortgage Fixed Rate & Unusable Funds Explained

August 23, 2021     6 comments

If you have decided that you’d like to use a reverse mortgage to tap into your home equity while remaining in your home, there are several considerations that will help you determine how to make the most out of your loan.  A reverse mortgage can be an excellent way for some households to boost their cash flow in retirement, establish a “rainy day” fund for health care expenses or other unexpected costs, or provide a lump sum for a pressing expense such as home renovations or maintenance. If you are... Read Full Article

Reverse Mortgage Attorney Asks: Rules of Spouse & Survivorship

August 23, 2021     28 comments

Hello ARLO, Husband & Wife, both over 70-years-old, occupied principal residence in California for many, many years and have no other home. Husband had a fall in late 2016 and was discharged from the hospital to a board & care facility to recover. Husband had been at board & care facility for 4 months when husband & wife applied for a reverse mortgage in early 2017 seeking to both be borrowers on the loan. The home was Husband's permanent place of abode, and he had no other permanent residence.... Read Full Article

Advantages and Disadvantages of Fixed Rate Reverse Mortgages

August 23, 2021     4 comments

Fixed Rate Reverse Mortgages – which is right for you? Many senior borrowers have been raised on the idea that a fixed rate loan is the “only way to go”. Still others remember back to the early 80’s when interest rates climbed as high as 18%. Some borrowers experienced rising interest rates from adjustable rate loans (or knew others who did) and some remember family and friends whose payments rose to a point where they could no longer afford their homes. A fixed rate locks the rate in for the... Read Full Article

How to Deduct Reverse Mortgage Interest & Other Costs

August 18, 2021     52 comments

Tax Benefits of Reverse Mortgages: What’s Deductible? Similar to a conventional mortgage, some costs associated with a reverse mortgage are tax-deductible, as are interest payments a borrower chooses to make.  Joe Diaz, owner of American Essential Services, a tax preparation company in Kissimmee, Florida, explains that borrowers can claim origination fees, broker fees, and even “discount points” if a broker offers a lower interest rate in exchange for an upfront fee. “The discount point is tax-deductible because it’s a prepaid interest cost,” Diaz notes. Here’s how it works: A... Read Full Article

2021 Reverse Mortgage Limits Soar to $822,375

August 5, 2021     8 comments

BREAKING: 2023 Reverse Mortgage Limits Reach All-Time High $1,089,300! 2021 Reverse Mortgage Limits Officially $822,375! The U.S. Department of Housing and Urban Development (HUD) just announced that the reverse mortgage lending limit for the Home Equity Conversion Mortgage (HECM) program will be raised from $765,600 to $822,325 effective January 1, 2021. The HUD Mortgagee Letter announcing the increase, can be found on the HUD website. After the limits remained unchanged for many years, this is the 5th year in a row where HUD has raised the lending limit. It... Read Full Article

Reverse Mortgage Occupancy Requirements Explained

August 2, 2021     72 comments

We live with my mother-in-law and were present throughout the process of her getting a reverse mortgage.  The broker is fully aware that we live there with her, help keep up the property, and pay living expenses.  He told us if she ever needed to go to a nursing home, if she was in the home at least once a month, they would not recall the loan.  What I am reading here seems contradictory to what we were told.  We were also told about having 12 months to sell or... Read Full Article

Selling an “Upside-Down” Reverse Mortgaged Home

July 7, 2021     14 comments

I am still confused about debt after I sell. My wife and I have a current reverse mortgage debt of $300K on a Seattle (98146) house valued by Zillow at $310K. At time of reverse mortgage award it was appraised at $380K. We took out the reverse mortgage about 15 years ago thinking it would be our home until death. Unfortunately, for health reasons, we can no longer live in the Seattle weather; I am 88 yrs. old (VA 100% permanent and totally disabled) and she is 82 years old.... Read Full Article