George Bush signed the Housing and Economic Recovery Act on July 30. It officially went into effect on October 1st. For seniors 62 and over the law officially raised the national reverse mortgage lending limit to four-hundred-seventeen thousand dollars.
The former limit for most parts of the country was $200,160. As of November 6, 2008 reverse mortgage lenders began funding reverse mortgages with the new lending limits.
The act primarily helps senior homeowners, who own homes valued in excess of $200,160. In fact these homeowners can borrow as much as twice the amount as before. As an added bonus the closing costs on the higher loan amounts have reduced as a percentage of the value of of the home.
The reverse mortgage lending limit increase has come at exactly the right time for homeowner and commercial flooring company owner Wilma Johnson. Mrs. Johnson's flooring business is one of the casualties of a bad economy. Since the beginning of 2008 flooring jobs have trailed off to next to nil, and Mrs. Johnson must concern herself more and more with simple things like paying day to day bills. Her mortgage payment alone eats into her dwindling savings at a rate of $1,450 per month.
Mrs. Johns saw her income cut in thirds since the commercial market collapsed. She is unsure when things will turn around. With the new lending limits in place she chose to get a reverse mortgage to refinance her old forward mortgage. She now has breathing room without the big mortgage payment.
One of the common misconceptions regarding senior homeowners getting a reverse mortgage is that these borrowers all must own their home with out liens or a mortgage against the home.
The truth is that well over sixty percent of senior candidates for a reverse mortgage are looking into it for the express purpose of paying off a current forward mortgage. They have the same issue as Mrs. Johnson. The mortgage payment is difficult to handle.
The new law comes as a boon to many 62+ homeowners with mortgage amounts in excess of the former lending limits. Now, these same homeowners can use a reverse mortgage to pay off their mortgages to free up much needed monthly income for other life expenses.
The former limit for most parts of the country was $200,160. As of November 6, 2008 reverse mortgage lenders began funding reverse mortgages with the new lending limits.
The act primarily helps senior homeowners, who own homes valued in excess of $200,160. In fact these homeowners can borrow as much as twice the amount as before. As an added bonus the closing costs on the higher loan amounts have reduced as a percentage of the value of of the home.
The reverse mortgage lending limit increase has come at exactly the right time for homeowner and commercial flooring company owner Wilma Johnson. Mrs. Johnson's flooring business is one of the casualties of a bad economy. Since the beginning of 2008 flooring jobs have trailed off to next to nil, and Mrs. Johnson must concern herself more and more with simple things like paying day to day bills. Her mortgage payment alone eats into her dwindling savings at a rate of $1,450 per month.
Mrs. Johns saw her income cut in thirds since the commercial market collapsed. She is unsure when things will turn around. With the new lending limits in place she chose to get a reverse mortgage to refinance her old forward mortgage. She now has breathing room without the big mortgage payment.
One of the common misconceptions regarding senior homeowners getting a reverse mortgage is that these borrowers all must own their home with out liens or a mortgage against the home.
The truth is that well over sixty percent of senior candidates for a reverse mortgage are looking into it for the express purpose of paying off a current forward mortgage. They have the same issue as Mrs. Johnson. The mortgage payment is difficult to handle.
The new law comes as a boon to many 62+ homeowners with mortgage amounts in excess of the former lending limits. Now, these same homeowners can use a reverse mortgage to pay off their mortgages to free up much needed monthly income for other life expenses.
About the Author:
To get a comprehensive understanding of the reverse mortgage anywhere in the U.S. (Says Texas but the info is universal), go to Free Downloadable Texas Reverse Mortgage Guide. One other great place to go isReverse Mortgage Texas - Specific Answers.
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