Reverse mortgage lenders and originators typically discuss property taxes in terms of non-payment, delinquencies, and in worse-case scenarios a technical default. However, there’s another property tax risk that can displace older homeowners who may forfeit their hard-earned accumulated equity- increasing property tax rates.
In June, Rocket Mortgage ranked the states with the highest property tax rates. The five most expensive states for property taxes are New Jersey, Illinois, New Hampshire, Connecticut, and Vermont. While most states have several property tax exemptions for seniors, those with disabilities, and veterans many older homeowners continue to find themselves in the unenviable position of having to choose to pay the taxman or cover living expenses.
Lawmakers have attempted to respond to the hardships property taxes impose on some seniors. Some states, like California, have property tax postponement programs that postpone payment until the homeowner moves, dies, or the title is passed onto an ineligible party. Other states have enacted programs that are targeted to assist seniors with few assets and low incomes which include property tax breaks for homeowners over the age of 65.
The challenge is tens of billions of dollars of property tax aid are going unused each year, says Josh Hodges, a chief customer officer with the National Council on Aging. “You’ve earned these benefits,” Hodges said. He encourages older homeowners to think of the property tax assistance programs “like their Medicare, like their Social Security.”
While reverse mortgage professionals want to originate loans, they also care deeply about the older homeowners in their community, many with whom they’ve forged a personal connection with. Consequently, reverse mortgage originators should be aware of those who provide counseling and benefits coordination for seniors who are struggling to pay their property taxes. A good place to begin is for the originator to understand the program’s requirements and process. Next, is to forge a relationship where you can serve as a potential solution for those who don’t meet the eligibility requirements to receive property tax assistance.
In a future segment, we will examine the challenge that rising homeowners insurance premiums for homeowners of all ages.
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