![]() ![]() He says these deductions can all be listed on Schedule A of a 1040 form. “Sometimes the IRS doesn’t get everything reported correctly, and you must have all your ducks in a row.” “The key thing would be, make sure the borrower saves their final settlement statement (which lists the various fees) when they close, for when tax time comes,” says Diaz. The HECM borrowers have had this ability all along and now the jumbo borrowers also have it.In some states like Florida, the “intangible fee” can also be claimed in reverse mortgages. This protects borrower equity longer and gives the borrower more choice on how and when you use all or part of your equity. Why is that significant change? If borrowers do not need all the money at the initial draw, they can leave it on a line of credit that does not accrue interest on the funds they are not using. This means that borrowers no longer must take a full draw of their loans if they want the jumbo reverse mortgage. In addition to lower fixed rates, there are lines of credit now available on the jumbo programs. Now with fixed rates available as low as 4.99% (5.35% APR) on the jumbo programs , borrowers can combine the higher property values, lower interest rates and higher amounts as a percentage of the value and the result is that the jumbo programs are really looking good to many borrowers.Įven those who looked at them before and dismissed them thinking they just couldn’t get enough money, or didn’t like the higher rates, should take another look in 2020. ![]() (keep in mind that the private investors will still have criteria the project will have to meet to be eligible). However, the good news is that the proprietary programs are now accepting loans on condominiums down to a value of $400,000 which still doesn’t include all condos but will include a whole lot more than before.Īnd with the better terms outlined previously, a lot of condo owners in higher dollar markets will have a place they can go for a reverse mortgage even if the project is not HUD approved The new single approval is almost a full blown project approval requiring just about the same documentation as a full project approval with the only difference being the time it takes to complete the process after all the documentation has been gathered and reviewed by the lender. ![]() The spot approval program was a true streamlined approval for condos if they did not have 10% or more concentration in the project and the project met certain parameters. If HUD chooses to return to different limits based on housing costs in the area, it would obviously affect this newly announced limit depending on where the property is located and property values in the area.Īnd even though HUD announced recently that they now offer a single unit condo approval once again, that procedure is nothing like the old “spot approval” process that HUD once offered. The regional differences were in place before a national limit was implemented as part of the Economic Recovery Act and there has only been one national limit for the past 10 years. ( Continue reading my article on this topic at )īut for now, HUD has not taken the HECM out of the nationwide, across the board limit. ![]() HUD has made comment that they could move the HECM from one national limit to a range based on the region and the values of homes in the area where the property is located. Starting January 1, 2020, the 2020 HECM lending limit will be $756,500, up from $726,525.īut this bit of news comes with an asterisk if you will as there may be another change on the horizon. Over that same period, properties began to rise in value again after 2012 giving borrowers more equity, jumbo & proprietary programs reemerged giving borrowers access to loan programs for higher valued homes once more and HUD put protections into the program for non-borrowing spouses.Īll in all, though, the moves made to pull back in the reverse mortgage availability have been more prevalent over the past 7 years than those that would make borrowers happy.īut then came 2019 and we began to see some positive changes and are very excited about changes we see coming for 2020!įor some great news comes a change in lending limits nationwide! HUD just announced that for the 4 th year in a row, they are again increasing their maximum lending limit. HUD has implemented more restrictions, lowered amounts available to borrowers, increased eligibility requirements that borrowers had to meet and overall, reverse mortgage borrowers have had little to be happy about for a while.ĭon’t get us wrong, it hasn’t been all bad news. It seems that reverse mortgage borrowers have been getting nothing but bad news for the past 7 years. What’s New and Exciting for 2020 Reverse Mortgages? ![]()
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