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The Bureau’s Advice and Who They Say is the Best Source of Information
It was only two short years ago that the CFPB or the Consumer Financial Protection Bureau issued it’s first report to congress on the Home Equity Conversion Mortgage or reverse mortgage program. In this week’s segment we will examine what questions this guide addresses as well as the questions it raises. First the guide begins by admonishing potential borrowers to do three things: 1- don’t sign loan documents until you understand how the loan works, 2- know your options besides a reverse mortgage and 3- speak with an approved HECM counselor.
Second it addresses typical questions as to who can remain in the home, the obligation to pay property taxes and insurance, the length of time spent in the home and the advantages of waiting.
Third, when it comes to waiting the CFPB rightfully states it is better to wait until both homeowners are 62 or older as a younger non-borrowing spouse would not be eligible to continue receiving monthly tenure payment or have access to the line of credit. What is not mentioned are the risks of waiting when home values may have declined or interest rates inevitably rise reducing available proceeds. Couples with…
Download a transcript of this episode here.
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