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HECM product changes
How do they benefit me?
HECM product guidelines were put in place by the United States
Department of Housing and Urban Development (HUD) to protect
borrowers and further strengthen the HECM reverse mortgage
loan product.
Financial Assessment More Affordable Over Time
HUD now requires a more Upfront mortgage
thorough evaluation of a insurance premiums
borrower’s ability to meet (MIPs) have been
the obligations of his/her standardized by the FHA
HECM reverse mortgage to bolster the reverse
loan. mortgage loan product.
Effective October 2, 2017,
borrowers will be charged
Non-borrowing Spouse an upfront MIP of two
percent of the appraised
Loan amounts are value of the home. Annual
available to borrowers MIPs have also been
with a non-borrowing reduced - borrowers
spouse under the age of will now be charged an
62. Rules allow the eligible annual MIP of 0.5% of the
spouses of borrowers outstanding mortgage
who pass away to stay balance – reduced from
in the home without 1.25%.
foreclosure, as long as the (On a $200,000 balance, 1.25% is $2,500
surviving eligible spouse vs $1,000 for 0.5%.)
complies with the loan
terms.
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