Happy New Year and please do not forget to consult with your tax professional before preparing your taxes if you are contemplating a refinance this year. Loan Origination income criteria is largely based on the revenue that is reported to the IRS and taking all of your available deductions may assist in tax savings but it could also negatively affect your income for the purposes of qualifying for a loan. All lenders will require that the borrower sign and execute a tax verification with the IRS. If there are differences the tax preparer will be notified.
The New Year brings changes to the mortgage industry. Most notably at this time are proposed changes with the FHA sponsored reverse mortgage. The popular fixed standard H.E.C.M. may no longer be a program that is available. The program has been the most popular reverse mortgage in the product lineup. Other programs will not be affected. The implication is that if you have been considering a reverse mortgage, now is the time to act. The fixed standard H.E.C.M. often allows for the largest distribution to the borrower. This may be the reason that FHA no longer wants to insure it. Generally the lending community is given some warning by FHA about the deletion of a product. Do not wait for the official announcement as many investors will stop accepting applications as of that date.
One other change regarding reverse mortgages has come from the California legislature. It is acceptable for a borrower to seek mandatory reverse mortgage counseling on the telephone. California now stipulates that if a borrower does not wish to receive counseling on a face to face basis they will now need to sign a declaration that states the face to face counseling has been waived in favor of the telephone session. We are now asking you which way you would like to counsel and providing you with the information needed to complete the counseling in the manner prescribed.
If you have any questions regarding this information or any mortgage related question please don’t hesitate to call Citylights Financial
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