35.
Mr. James Abioye and Mrs. Catherine Abioye have been married for 30 years. James just turned 63-years-old, and recently retired because of health issues. Catherine is 59-years-old, and is still working as a Surgical RN. Several decades ago, they jointly purchased—and currently own—a single parcel of real estate, their primary residence. There is a substantial amount of equity in the home, and it is free and clear of all liens, except current year taxes. Now that Catherine is the only spouse still working, the married couple is looking for real estate financing that will allow them to remain in their home and support their lifestyle. The Abioyes found one loan product that would support their goals, but were warned by the lender that the loan amount would be lower than they anticipated because of Catherine's age. When, if ever, is this accurate advice on the part of a lender?
a. Under federal rules related to senior housing.
Per federal law, a reverse mortgage is only available to home owners who are 62-years-old or older, and who have substantial equity in their homes. The reverse mortgage (aka the “senior reverse mortgage” or the “reverse annuity mortgage”) converts the equity in the home into a liquid asset so that borrowers are able to remain in their homes, while paying their expenses. The loan product is called a “reverse” mortgage because repayment is not required until a specific event occurs. Specific events include, for example, the death of the borrower, the borrower going to live in an assisted living facility, or the property being sold. Because there is no repayment until one of these events occur, unpaid interest is added to the principal and the loan debt grows (i.e., negative amortization). Here, because Catherine Abioye is only 59-years-old, she is too young for a reverse mortgage. Provided she qualifies in other ways, however, she will be considered a non-borrowing spouse and the reverse mortgage loan amount available to the Abiuoyes will be based upon her age.
Incorrect answer. Please choose another answer.
b. Under the federal Equal Credit Opportunity Act.
Per federal law, a reverse mortgage is only available to home owners who are 62-years-old or older, and who have substantial equity in their homes. The reverse mortgage (aka the “senior reverse mortgage” or the “reverse annuity mortgage”) converts the equity in the home into a liquid asset so that borrowers are able to remain in their homes, while paying their expenses. The loan product is called a “reverse” mortgage because repayment is not required until a specific event occurs. Specific events include, for example, the death of the borrower, the borrower going to live in an assisted living facility, or the property being sold. Because there is no repayment until one of these events occur, unpaid interest is added to the principal and the loan debt grows (i.e., negative amortization). Here, because Catherine Abioye is only 59-years-old, she is too young for a reverse mortgage. Provided she qualifies in other ways, however, she will be considered a non-borrowing spouse and the reverse mortgage loan amount available to the Abiuoyes will be based upon her age.
Incorrect answer. Please choose another answer.
c. Under federal rules related to reverse mortgages.
Per federal law, a reverse mortgage is only available to home owners who are 62-years-old or older, and who have substantial equity in their homes. The reverse mortgage (aka the “senior reverse mortgage” or the “reverse annuity mortgage”) converts the equity in the home into a liquid asset so that borrowers are able to remain in their homes, while paying their expenses. The loan product is called a “reverse” mortgage because repayment is not required until a specific event occurs. Specific events include, for example, the death of the borrower, the borrower going to live in an assisted living facility, or the property being sold. Because there is no repayment until one of these events occur, unpaid interest is added to the principal and the loan debt grows (i.e., negative amortization). Here, because Catherine Abioye is only 59-years-old, she is too young for a reverse mortgage. Provided she qualifies in other ways, however, she will be considered a non-borrowing spouse and the reverse mortgage loan amount available to the Abiuoyes will be based upon her age.
Incorrect answer. Please choose another answer.
d. Never.
Per federal law, a reverse mortgage is only available to home owners who are 62-years-old or older, and who have substantial equity in their homes. The reverse mortgage (aka the “senior reverse mortgage” or the “reverse annuity mortgage”) converts the equity in the home into a liquid asset so that borrowers are able to remain in their homes, while paying their expenses. The loan product is called a “reverse” mortgage because repayment is not required until a specific event occurs. Specific events include, for example, the death of the borrower, the borrower going to live in an assisted living facility, or the property being sold. Because there is no repayment until one of these events occur, unpaid interest is added to the principal and the loan debt grows (i.e., negative amortization). Here, because Catherine Abioye is only 59-years-old, she is too young for a reverse mortgage. Provided she qualifies in other ways, however, she will be considered a non-borrowing spouse and the reverse mortgage loan amount available to the Abiuoyes will be based upon her age.
Incorrect answer. Please choose another answer.
