With the Financial Assessment in full effect, reverse mortgages are now ultimately more difficult to obtain than they once were, according to an article republished by MarketWatch over the weekend.
Originally published by Next Avenue, the article explores the onset of the Financial Assessment and what it means for prospective reverse mortgage borrowers today, particularly highlighting the qualification criteria borrowers are now subjected to under the new guidelines.
While the Financial Assessment requires more work on the borrower’s end, in terms of gathering and providing the necessary information to show they have the willingness and capacity to afford the loan terms, the article suggests that the rule should not be viewed as all that bad.
“New federal rules that kicked in last month may make it harder for some people to qualify for reverse mortgages,” writes Next Avenue’s Richard Eisenberg. “But they’ll also make it more likely that those who do receive reverse mortgages will have fewer worries about them.”
The article also quotes Phil Stevenson, principal of PS Financial Services in Coral Gables, Fla., who says these changes are positive overall.
“They’ll affect 5% to 10% of potential borrowers and, in reality, those are the ones who probably shouldn’t have done reverse mortgages in the past,” Stevenson told Next Avenue.
Read the article.
Written by Jason Oliva