I hadn't kept up with the affects of the new tax cuts on HELOCS and this shows just how important NotRot can be to all of us at times.
I am paying off a HELOC for a customer who mentioned she may not be able to deduct the interest on it. Im adding a LOC on top of the payoff using a HECM (Reverse mortgage) that the customer wanted. So the question comes to mind after reading thd above article is my customer facing the same situation with the reverse LOC?
Three hours later, reading, reading, reading, going in circles with underwriting as they don't have any new directive. Explaining to them acquisition equity vs debt equity, and HECM Sales 101 and that we should know this.
The customer needs to talk to an accountant says they. Grrr..
I made the call. Convinced that it's a debt equity LOC, telling the UW we may have just lost the loan if the customer wants to pay her interest monthly but cannot deduct it. She has the money but is setting up for retirement using all resources including a HECM LOC.
The UW gave me a waiver on a major condition. I still had to speak to my customer and let her know. She thanked me and said she felt from the beginning that may be the case and that trading one LOC for another may possibly be moot.
Still she wanted the HECM LOC as it is non-recourse and will grow. For you ex mortgage brokers you know exactly what I'm going through. The article and the knowledge and confidence I gained after helped keep the loan intact regardless of tax consequences.
One more notary gets one more job. Yes, this was work related. Thanks for the heads up. |
