NRMLA Reissues Ethics Guidance for HECM-to-HECM Refinance After Recent Changes
The reverse mortgage program continues to change for the better, this time making more proceeds for older borrowers.
According to an article published by Reverse Mortgage Daily, at an interest rate of 6% borrowers who are 78 and older will potentially have access to greater principal limits than before.
This change means more money for older borrowers and a greater chance of a HECM-to-HECM Refinance for borrowers who obtained a reverse mortgage before the changes were announced.
While borrower(s) must wait at least 6 months from the closing date of their reverse mortgage in order to be eligible for a refinance, NRMLA once again stresses the importance of maintaining ethical values while speaking with potential clients about the possibility of a HECM-to-HECM Refinance.
Specfically, NRMLA states that all NRMLA members:
“Need to assure that the loan products it offers to consumers provide them a ‘bona fide advantage.'”
In addition, NRMLA’s ethics guidance prohibits loan originators from “steering consumers to loan products that may not be in the consumer’s best interest.”
In short, just because a HECM-to-HECM refinance can take place, doesn’t mean it always should take place.
Situations such as adding a non-borrowing spouse, a rise in home value or, in this case, a higher principal limit based on age, may be prime conditions for a homeowner to consider a refinance. However, each situation is different and should be analyzed individually as there may be other factors involved.
If a borrower is able to do a refinance, an added benefit is credits toward a lot of discounted fees.
As with any importance financial decision, however, there should be steps taken in order to determine the correct course of action.
As a member of NRMLA and a Certified Reverse Mortgage Professional, I uphold the highest ethical standards in any given situation.
Interested in a reverse mortgage or simply want more information? Give PS Financial Services a call at (888) 845-6630 or via email at info@ReverseMortgage.com. We don’t pressure those who inquire. We are simply here to help.