A reverse mortgage borrower wants to add their adult child as a co-borrower after the loan has closed. What is the lender's most likely response?
Correct Answer
C) The existing loan must be paid off and a new reverse mortgage originated
Reverse mortgages cannot typically add new borrowers after closing through modification or assumption. Since reverse mortgage eligibility is based on the youngest borrower's age and other specific criteria, adding a new borrower would require paying off the existing loan and originating a new reverse mortgage with all borrowers meeting eligibility requirements.
Why This Is the Correct Answer
Reverse mortgages cannot typically add new borrowers after closing through modification or assumption. Since reverse mortgage eligibility is based on the youngest borrower's age and other specific criteria, adding a new borrower would require paying off the existing loan and originating a new reverse mortgage with all borrowers meeting eligibility requirements.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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