Many people take out a mortgage, so that they are able to purchase or finance a home. Due to the economic crisis, many people are unable to pay their bills. As a result, many people are taking advantage of reverse mortgages and as a consequence, the laws governing them are becoming stricter. Â A reverse mortgage allows the homeowner or the borrower off the loan to access the equity of his or her home and use it for other reasons such as paying off other bills or debt as reported by the New York Times in a September 6, 2013 news article.
The laws changed at the end of September 2013, and they will reduce how much a borrower will be able to access in equity on his or her home. It is estimated that borrowers will be able to take out approximately 15% less than they were allowed to take out under the prior laws. Also, the equity which one can access during the first year of the loan will be limited. The stricter rules are aimed at ensuring that the buyer will be able to pay off the loan in the end. Moreover, the limit during the first year will deter people from spending heavily as one was able to with a reverse mortgage under the previous laws. Now, after it is determined how much the homeowner is allowed to get, rather than accessing the full amount, he or she might be able to take only half of that during the first year. However, there might be dire circumstances which might require an exception, but this would need to be approved by the lender. Generally, credit card debt is neither a high priority under this program nor does it require an exception.
Jayson Lutzky is a bankruptcy lawyer who has 30 years of experience practicing law in New York. His thousands of satisfied clients show that Mr. Lutzky is a strong attorney and tough negotiator. If you are in debt, whether it is credit card debt or mortgage debt, then set up a free in person consultation with Mr. Lutzky. He can help decide if filing for bankruptcy is right for you or you and your spouse. Call 718-514-6619 today to learn more and to set up an appointment. Visit www.MyNewYorkCityLawyer.com for further information.