The Future of Reverse Mortgages, and Why You Might Act Now

Reverse mortgages are going to be a less appealing way to contribute to retirement, due to recent changes by the Trump Administration.  If you have been considering a reverse mortgage, the time to act may be now. Richard Eisenberg discusses upcoming changes in this Forbes article.

Starting October 2nd, the following changes will be placed into affect.

Changes Coming to Reverse Mortgages:

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Changing Your Mind About a Mortgage

Once you have put down earnest money on a house, are you locked in with no options? It actually depends on how your contract is written.

Many Generation Xers and Millennials are increasingly remorseful about their home purchases. A recent article in the Wall Street Journal points to a survey by Nerdwallet.com in January that revealed, “nearly half (49%) of homeowners who responded said they would do something differently if they had to go through the process again.” Read more

Kids Helping Mom and Dad With the Mortgage

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After years of getting help from mom and dad, some adult children are returning the favor and buying their parents a house.

Not all lenders will allow adult children to co-sign for their parents on jumbo loans-those that exceed $417,000 in most areas and $625,500 in some high-priced places, says John Walsh, CEO of Milford, Conn.-based Total Mortgage. However, enough lenders allow it that most children who want to help home-buying parents, whether working or retired, should be able to co-borrow, Mr. Walsh says.

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A Lone Spouse on a Home Loan

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It takes two to make a marriage work, the saying goes. But sometimes it’s better when only one of them applies for a jumbo mortgage.

There are a number of reasons why one spouse stays off a home loan, says John Walsh, CEO of Milford, Conn.-based Total Mortgage. That person’s high debts, low income or poor credit history could be deal-killers or trigger a higher interest rate.

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Parents Helping with Jumbo Loans

 Getting Mom and Dad to co-sign a jumbo mortgage is a tough sell all around.

The practice is rare, but a few lenders will allow parents to help their adult children qualify for jumbo mortgages, which exceed conforming-loan limits of $417,000 in most places and $625,500 in high-price areas such as San Francisco. A typical scenario: a first-time home buyer whose salary has a strong upward trajectory but who hasn’t been on the job long enough to meet income requirements to buy property in a pricey locale, such as New York, says Ray Rodriguez, regional mortgage sales manager for Cherry Hill, N.J.-based TD Bank, which lends in 15 East Coast states.

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FHA Loans Are Difficult to Obtain

29-what-is-a-fha-loanMost large banks have curtailed FHA-backed loans in the past two years because of concerns about credit and legal risks.

The rollback among big banks follows harsh penalties meted out by the Justice Department , which accused many banks of putting FHA on the hook for shoddy loans in the years leading up to the mortgage meltdown. Market shares at BB&T, Bank of America, Fifth Third Bancorp, Flagstar Bank, M&T Bank, Regions Financial and Wells Fargo have all declined in the past two years, the data shows. Read more

What is a Short Sale?

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A Short Sale may be an alternative when you can’t pay your mortgage.

It is called a short sale because you do put your home up for sale, but the mortgage bank agrees to accept a buyer that will not be paying the full loan amount, an amount “short” of what is owed on the loan. The bank is “shorted” After the sale the Seller is usually able to walk away from the home without owing the bank the difference.

There are occasions where the bank will seek a deficiency judgment against the former owner, so be sure to have this discussion with your agent and work to include language in your closing that protects you against deficiency judgments.

Why would you opt for a “Short Sale” versus a “Foreclosure”?
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