The article provides an overview of the significant increase in the reverse mortgage loan limit announced by the Department of Housing and Urban Development (HUD) in October 2008. This change is particularly beneficial for senior citizens seeking additional retirement income, especially those whose retirement investment portfolios have seen a substantial decrease in value. Unlike a conventional home equity mortgage, a reverse mortgage is not repaid until the homeowner permanently leaves the home, sells it, or passes away.
Before November 1, 2008, reverse mortgage loan limits varied from $200,160 in areas with low home values to $362,790 in areas with the highest home values. However, a single loan limit of $417,000 has now been established for federally insured reverse mortgages issued through HUD's Home Equity Conversion Mortgage (HECM) program.
If you have already obtained a reverse mortgage and your home's value exceeds the amount you received, you may be eligible for a new loan with a higher limit. However, a reverse mortgage will never be issued for an amount exceeding the current value of your home, regardless of the limit. The amount you are eligible to receive also depends on your age and other factors. As everyone's circumstances vary, only a reverse mortgage counselor can inform you of the actual amount you are eligible to receive.
HECM loans can also be used to purchase a primary residence after January 1, 2009. These loans are subject to stringent regulations and requirements, but they may assist you in securing a safe and comfortable home to live in during retirement. Although a substantial down payment is required, you will not be required to make monthly mortgage payments under this scheme. The down payment cannot be obtained through another loan, but it can be received through approved FHA programs.
If you are over the age of 62, you may be eligible to receive a reverse mortgage or a reverse mortgage for purchase loan. Other requirements and restrictions also apply. If you require additional retirement income to pay off your current mortgage, embark on a long-awaited trip, or simply cover daily living expenses, a reverse mortgage can assist you. You will retain ownership of your home, and the lender cannot take your home from you, even if its value falls below the loan amount. To learn more about your options, contact a reverse mortgage lender. They can provide information about a potential loan limit and explain the loan application and counseling process.
Reverse Mortgages Are Strong in a Declining Economy
Amidst recent news that people are having trouble finding mortgages, many seniors have become concerned about the market for reverse mortgages. Unlike the forward mortgage market, the reverse mortgage market is still strong and funds are still available.
Common Questions about Reverse Mortgages
With the economy in decline, more seniors like you are viewing their homes as a source of retirement funds. You’ve spent decades paying for your home, and now it’s time to let your home see you through the coming years. However, many people are concerned about reverse mortgages. Here are answers to a few of the most common questions about these powerful retirement tools:
Answers to Common Reverse Mortgage Questions
If you are considering getting a reverse mortgage, you may be finding the information you see a bit confusing. As with any other big decision, it’s important that all your questions are answered thoroughly before you choose to take out this type of loan. Below are answers to some of the questions consumers often ask about these mortgages.
