Changes include higher upfront costs, a lowered principal limit factor and an interest-rate deduction.
Advisors have recommended clients use reverse mortgages for cash management, delaying Social Security withdrawals and funding long-term care.
In August the Consumer Financial Protection Bureau issued a warning against taking out a reverse mortgage to maximize Social Security benefits.
By Deborah Nason | CNBC
As home equity conversion mortgages, also known as reverse mortgages, have grown in popularity in recent years, financial advisors have been employing them as risk- and cash-management tools. New government policy changes, however, may put a crimp in these strategies.
The Department of Health and Urban Development describes the HECM as “FHA’s reverse mortgage program that enables you to withdraw a portion of your home’s equity.” It is for homeowners age 62 or older.
