HUD Makes Big Changes to HECM-Effective 10.2.17
HUD made a surprising announcement August 29, 2017 in regard to the FHA insured Reverse Mortgage. The announcement came as quite a surprise, as no one in the industry was expecting such changes at all. I believe that our industry is still in shock as we all try to understand what effect this is going to have on our beloved program.
HUD has once again decided to lower the borrowing power on the loan. It is said that the reduction in principal limit (loan amount) could affect a 62 year-old borrower as much as 22%. This change will certainly limit the approval for those borrowers with higher liens being paid from the proceeds, or for those using the HECM for Purchase product in trying to buy new home.
Also included in these guidelines is an increase in the upfront Mortgage Insurance Premium for some borrowers. Currently if a borrower’s mandatory obligations are 60% or less of the available Principal Limit, the upfront MIP is .50% of the appraised value of the property. For those borrowers whose mandatory obligations exceed 60%, the upfront MIP goes to 2.50%. Moving forward the upfront MIP will be 2% for all loans.
As many of you are aware, interest does accrue on the balance of the reverse mortgage. There is also ongoing MIP currently at a rate of 1.25%. All new applications dated October 2, 2017 and after will have an ongoing MIP of .50%. This is good news in that the balance of the loan will be growing at a slower pace, however; this change also affects the line of credit growth rate. The growth rate will be reduced by .75%.
If for any reason you are currently thinking about a reverse mortgage and need to maximize your borrowing power, I encourage you to contact one of Homeowners Mortgage experienced professionals today.
You must have your counseling certificate in hand before we can take your application. If you have not made your appointment with your counselor, you need to do it now. If you need a list of available counseling agencies, please contact the Homeowners Reverse Mortgage Center and the staff will be happy to get this list to you. You can reach them at Reverse@homeownersmtg.com or call 828-267-7000.
By: Teresa Maines
SVP & Director of Reverse Mortgage Lending
NMLS # 884873
Saved By Grace-Ferals & Felines
We have the opportunity to highlight this 501c charity and help spread the word on the importance of spaying and/or neutering your pets. We sat down with Diana Miles and asked her why she and her friend Jodi formed this charity, here is what she had to say:
“I am very passionate about public education on spaying and neutering your pets….however, I must take it one step further. There are so many animals that aren’t anyone’s pets, they are strays, they are homeless and they reproduce at alarming rates. Animal control is called in to someone’s neighborhood or a business because there are suddenly 50 cats. This happens when people are irresponsible and allow their non-spayed/neutered “pet” out to fend for themselves, which turns into a nuisance for someone. Animal control then picks them up and they are all euthanized within a few days. Those are the more lucky ones….many are left to starve and have kittens to feed and cannot meet the demand….so very young kittens are found so many times close to their dead mother. I feel THIS MUST STOP! I am a huge advocate of TNR….trap, neuter, release, and to only release back to areas where the animals will be fed and cared for.
The kittens that we are able to rescue take a tremendous amount of care. We do have volunteers that offer foster homes to these rescues, but my rescue partner, Jodi and myself foster many in our homes. Before the kittens can be placed for adoption, they must have considerable vet care, and are ALWAYS spayed or neutered. We work in conjunction with Pet Supermarket and PetSmart in Lexington, SC. We provide housing, food, medications, shots, etc. for many many animals throughout the year. This happens to be kitten season and between Jodi and myself , we are housing 110 kittens. We operate using our own monies and donations. ANY donation, no matter the amount, will be MOST appreciated and put to good use. Please visit our website https://www.savedbygracerescue.com/ where you can view our current rescues and make a secure donation to help those, that can't help themselves.
Today we have the spotlight on Craig Calkins, our Manager of Information Technology he is located at our corporate office on Devine Street in Columbia. Craig is a major resource in keeping our organization running, we hope you enjoy getting to know a little more about him below:
How many years have you worked at HME ? 13+
What is the favorite part of your job? Working with great people.
Favorite activity outside of work: Traveling with family
Favorite LOCAL Product or Business, and why: Reaves Woodworks it’s great to see one of my closest friends take a risk to do something he truly loves.
Name a must-see LOCAL spot in Columbia. Riverbanks Zoo & Garden especially after the expansion.
You can see that Craig is a man of few words, however he always makes sure we are running smoothly. Thank you Craig for you loyalty, dedication and sleepless nights-we couldn’t do it without you!!
Team Homeowners Mortgage
CONSIDERED A REVERSE MORTGAGE IN THE PAST
IT MAY BE TIME TO TAKE ANOTHER LOOK
Perhaps you have considered a Reverse Mortgage in the past and the numbers just didn’t work for you. Well, now may be the time to take another serious look. Since 2012 home values have been steadily on the rise, so you now may have a substantially increased equity position in your home. Which means you will have more proceeds available from a Reverse Mortgage. Also, you are older and since calculations are based on the age of the youngest borrower, the older you are the more proceeds are available. So in the last 5 years the two “defining” factors for a Reverse Mortgage, age and home value, may have changed for the better for you. Thus, increasing the equity in your home and therefore generating more proceeds available to you. Also, if you have a mortgage to pay off, that mortgage balance is now lower than it was several years ago which will also increase your available equity.
You are now farther along in your retirement planning so you may have a clearer picture of the direction you should take to achieve your goals. So, whether it’s for downsizing, travel, helping the kids and grandkids or just having that peace of mind that comes with a cushion for unforeseen expenses a Reverse Mortgage may now work for you.
Remember, with a Reverse Mortgage you own title in your home for as you live in the property as your primary residence. You must stay current on property taxes and homeowners insurance payments. It’s a home loan, with no monthly mortgage payment, that enables you to convert a portion of your homes equity into Tax Free funds. And, because the home is the only collateral attached to the loan when your estate is settled any remaining home equity, along with your other possessions, belongs to your heirs. So now’s the time to take another look at the HECM “Reverse Mortgage”.
Interested in more information on the reverse mortgage? Contact us today at 828-267-7000 or https://homeownersmtg.com/forms/reverse We will be happy to assist you.
By Jim Carithers
NMLS # 662949
Jim has been in the mortgage finance industry for over 40 years and loves working with Seniors wanting to maintain their independence and enjoy this special time in their lives. Please give him a call at (904)-662-2324 if you would like further details or have questions about the application process.
A security instrument will be taken in your home. Borrowers continue to be responsible for certain ongoing costs such as property taxes, insurance, and general maintenance. This is not an offer to lend. NMLS # 154698
STOP SENIOR HUNGER
We received a postcard at our office this week titled "1 in 10 SC Seniors Faces Hunger" upon opeing I learned that across our territory, tens of thousands of parents and grandparents face dark times in what should be their golden years. More than 10% of seniors in South Carolina struggle to put food on the table. Without our help-they are forced to make impossible decisions. Do I pay for food or pay for medicine? Can I skip the power bill this month? Which meal do I not eat today?
Make it a point to visit the Senior Hunger Fact Sheet and see how you can plant a seed of hope in your area. Together we can make a difference. #EndHunger #FeedingAmerica