- Borrowers will need some additional documentation including such things as:
- Income and tax forms (paystubs, W2’s or 1090’s, social security or pension awards letters)
- Payment history for various debts if not included on the credit report
- Documentation of assets currently owned or in the bank (monthly or quarterly bank statements)
- While credit score will not be a major factor in these changes, timely payment history especially on mortgages will be closely reviewed.
- The purpose of this Financial Assessment is to better protect borrowers and the Reverse Mortgage Program from too many defaults on taxes, insurance and maintenance issues. The lender will need to ensure the borrowers have the financial capacity to remain in this home the rest of their life while still meeting their obligations.
- Should the Borrower not meet the Financial Assessment guidelines the lender will need to set aside funds from the reverse mortgage in order to cover property charges for a certain period of time which will be calculated during the loan process (similar to an escrow account.)
- While the Financial Assessment may make it tougher for some borrowers to qualify don’t assume your credit or delinquent debt will disqualify you. You won’t know until you make a phone call.
To learn more about Reverse Mortgage Financial Assessment call:
Melinda Hipp, Certified Reverse Mortgage Professional, with Open Mortgage at 210-493-7332 or email email@example.com.