Taxes for Elderly Mortgage Applicants

Sam

Under the Equal Credit Opportunity Act (ECOA), an elderly applicant for a mortgage refers to a person 62 years or older. The only home loan available to elderly applicants is the reverse mortgage.

In a reverse mortgage program, the elderly applicant remains the owner of the property and is responsible for paying the property taxes. The loan advances are free of tax payments, as the Internal Revenue Service does not regard these as income. But the elderly applicant will have to pay taxes if he uses a part or the entire loan amount in order to purchase an annuity.

Elderly applicants also have the option to go for Property Tax Deferral (PTD) loans offered by state and local government agencies. Such a kind of reverse mortgage provides annual loan advances that are used to pay only the property taxes. Elderly applicants who are 65 years old or above can apply for such loan programs.

The amount of annual loan advance in a PTD depends on the property tax bill for that year. The loan advances cover up a part or the entire tax payments. But this loan program will not allow you to take another reverse mortgage along with it. The elderly applicant looking for a property tax deferral loan does not have to pay origination fee or insurance premiums. The closing costs are low and the interest rate is usually fixed.

Related Article

Reverse Mortgage: Home loan for seniors

Guest 0.10 Dollars($)

What is the least amount you can owe on you house to qualify for the reverse mortgage

Caron

Hi Rubie,

I find that your query has been answered at http://www.mortgagefit.com/know-how/about5706.html . Please go through it and if you have any related queries, do let us know.

Thanks,

Caron.

All times are GMT - 7 Hours

Page 1 of 1