Reverse Mortgage Limits Increased
By Riley Q Bangerter
Many older Americans who have resided in their houses for many years or decades saw the price of their houses rise dramatically, particularly recently. However, in high cost areas, for example the Northeast and West, home values have overreached the Congressionally-mandated cap of $362,790 for getting an FHA-backed reverse mortgage – leaving millions of seniors without access to the monetary security this vital program offers. The Expanding Homeownership Act of 2007 would make reverse mortgages available to an extra 2,000,000 seniors by raising the FHA’s Home Equity Conversation Mortgage ( HECM ) loan limit equivalent to the Fannie Mae / Freddie Mac conforming loan limit.
By skyrocketing and simplifying the loan amount, this change would help people seniors who have houses valued above this FHA loan limit of $362,790 but less than $600,000, get a reverse mortgage thru FHA. Eligible seniors would still need to be 62 years old or older and have paid off their mortgages or have only a tiny mortgage balance remaining.
The loan amount relies on the value of the home, the age of the home-owner and the anticipated IRs. The reverse mortgage does not need to be paid back until the borrower moves out of the home once and for all. HUD pronounced more than 308,000 seniors have used the federally-insured HECM loan program since 1990 to convert the equity in their home into money with no need to move. The volume of new reverse mortgages insured by the FHA’s HECM program has increased 10-fold during the last 6 years. As well as providing larger access to reverse mortgages, The Expanding Yankee Homeownership Act of 2007 would address growing fears about augmenting home repossessions and high-risk mortgages.
The law would protect and preserve the Yank Dream of homeownership by modernizing the FHA and giving house purchasers access to a safe, fair and reasonable alternative to exotic subprime loans. The law is presently outstanding before the U.S. House of Delegates .
Get a quote and see what you qualify for.
Vice-President of WSB Mortgage Services, Inc. with over five years in the reverse mortgage business, trained over 650 Loan Officers about the reverse mortgage and has been the speaker for over 500 client seminars about the reverse mortgage.
Photo by Martin P
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