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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
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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
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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
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The decision to take out a reverse mortgage may stem from a variety of reasons, whether it’s a desire to stay in your home or the need for extra cash flow. When facing the decision to take out a reverse mortgage or sell your home, there are a few factors to weigh. Each option has its own pros and cons and can vary depending on your particular situation. Pros & Cons of Selling Staying with a Reverse Mortgage Perhaps the most important thing to consider is your ultimate goal for... Read Full Article
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Hi ARLO, my mom passed away, I have inherited her home with a reverse mortgage on it. Can I still try and refinance the loan or home, or do I have to get a home loan myself? The reverse mortgage becomes due and payable when the last borrower on the loan is no longer living in the property. If mom was the last borrower, when she passed the loan became due and payable which gives you several options. I assume from your question that you would like to stay in... Read Full Article
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The troubled economy, pandemics and social unrest have made the idea of retirement very uncertain for many seniors who are now struggling to come up with ways to securely finance their futures. What most senior homeowners don’t realize is that getting a line of credit through a reverse mortgage can help them preserve their equity from inflation, as it will allow them to lock in on historically low interest rates and current home values which have grown tremendously in recent years, and increase the amount of loan funds available to... Read Full Article
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The HUD HECM program limits the youngest borrower to the age of 62 or older to be eligible for the reverse mortgage program. If there is a spouse of a borrower who is not yet 62, the older spouse can still get a reverse mortgage and the younger spouse can remain on title and would be known as an “eligible non-borrowing spouse.” Eligible Non-Borrowing Spouses An eligible non-borrowing spouse can also live in the home for life, even if the older spouse passes or should have to leave the... Read Full Article
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If I do a reverse mortgage, can I pull all the money upfront as a lump sum, or do I have to have a line of credit? Is there a cost to pulling out all the money upfront? HUD changed the program a little while back so that borrowers are capped at what they can pull from home based on the amount of what HUD calls the property charges that must be paid at the time of the loan. The bottom line is that borrowers who need all their... Read Full Article
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BREAKING NEWS: With Mortgagee Letter 2021-11 (ML 2021-11), HUD just clarified to reverse mortgage borrowers who obtained reverse mortgages when one spouse was not on the loan and was considered a non-borrowing spouse. Prior to 2014 when HUD changed the rules, these spouses had no protections under the loan, and after the 2014 changes, the “eligible non-borrowing spouse” designation came about with certain restrictions. The announcement helps borrowers who obtained their loans before and after the 2014 rule changes. Before 2014, non-borrowing spouses had no protection under... Read Full Article
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Ultimately the right time to get a reverse mortgage depends on what works out best for the borrower. The timing must be right for you and your needs. But we hear borrowers who are convinced that they want the loan but are thinking that they should wait a year or two until one of the borrowers is older so they can get more money from the loan. We believe this is the wrong strategy and we will explain why in this article. This can lead to borrowers paying higher rates... Read Full Article
