Reverse Mortgage Borrowers And Taxes: What Originators Should Be Aware Of
With tax season coming to a close, a new report aims to educate originators on reverse mortgages and taxes. While originators aren't expected to answer tax questions from borrowers, knowing where to send them to find the answers is quite useful.
For most questions, borrowers could simply seek the answers from their tax accountant. Though it is useful to know that Medicaid and other government programs can be affected by unspent balances from a reverse mortgage loan, according to Reverse Mortgage Daily.
"Even if the loan is taken as monthly payments, the payments could accumulate and push your resources over," according to Elder Law Answers, as reported by RMD.
"There can also be tax implications with respect to interest, since the interest that accrues on a reverse mortgage is taxable at the time it is paid."
The report also shares some information regarding possible interest deductions, as well as useful information regarding the filing deadline.
To learn more about how originators can be better prepared for questions regarding taxes and reverse mortgages, click on the image above.