Borrowers over the age of 55 years of age with an abundance of equity, good credit and light on income used to be able to get a preferred rate conventional loan, but now are getting declined for a mortgage refinance loan.
Since 2010, mortgage lending has an “ATR”, ability to repay, standard that is required for owner occupied properties on conventional loans. This ATR can cause some senior citizens who are on the cusp of qualifying for a conventional loan, to be declined for a loan due to a lack of income and they are not aware of this rule. They try to refinance at several banks only to be declined for the same reason since each bank must adhere to this rule or they can get in trouble for breaking this rule.
There is a mortgage loan someone over the age of 55 can qualify for with minimal income required and be able to pull out cash if needed at a competitive fixed rate or an adjustable line of credit. You can think of it as a senior citizen refinance loan, or retirement home loan of sorts since it is designed for borrowers over the age of 55.
The solution is a reverse mortgage refinance loan. Borrowers can make monthly payments on a reverse mortgage just like a conforming loan, for any amount as often as they want. There are now several reverse mortgage loan options to choose from including a low-cost option.
So, if you know of anyone over the age of 55 who has an abundance of equity and has been declined for a mortgage refinance loan, a reverse mortgage refinance loan can be a solution and is worth a look. It can give people some much needed cash or mortgage payment relief. To learn more about the types of reverse mortgages available click here to watch an educational video. Feel free to leave a question or comment below.
Best KW