Reverse Mortgage Information

Here is a piece of good news for all Washington state consumers. Due to a recently introduced law, residents of Washington will soon have access to more reverse mortgage lenders. They will also have more reverse mortgage safeguards for their security.

Reverse mortgages are a special financing arrangement that allows homeowners age 62 and above to borrow money from a lender. This money can be borrowed in a lump sum or monthly installments or as a line of credit. Interest is charged on the amount that is borrowed and keeps on getting added to the principal amount. This amount is repaid when the house is sold or the borrower dies or moves out of the house.

Until last year, only select leaders could offer reverse mortgages.  With the implementation of the new law i.e. HB 1311,  other lenders can also offer reverse mortgages. Now people will have access to more reverse mortgage lenders.

Under the initial legislation SB 6471, traditional leaders were not allowed to loan reverse mortgages. In the process this legislation limited the number of reverse mortgage lenders available. As a result of this legislation, Washington consumers had to face some difficulties in securing a reverse mortgage.

HB 1311 intends to put this practice to end. Several consumer protections have also been introduced in this bill so that the consumers do not end up paying an unfair amount. It also implies certain restrictions on lenders in order to curb exploitation of borrowers. The bill we be implemented starting July 26 onwards. This bill is sure to bring a sigh of relief for all those who had earlier problems in securing reverse mortgages.