Due to the financial crisis and President Barak Obama’s response to this crisis, it is very likely that very shortly the lending limits on all HECM Reverse Mortgages will be raised. The produced received a nationwide lending limit raise in the beginning of 2009. This raise brought the minimum lending limit for certain zip codes from $200,000 and a maximum of $365,000, to a national level of $417,000. This recent changed has made Reverse Mortgages much more accessible for many individuals who were previously, restricted by the low lending limits.
Since this increase, the powers that be; HUD (The Department of Housing and Urban Developement), the United States Congress, and the FHA (Federal Housing Administration) have decided that the National maximium lending limit of $417,000 is too low. Within the next few months, we can expect to see this limit raised to $625,000. This is an execptional gain for individuals looking to get the most out a Reverse Mortgage.
When you do a Reverse Mortgage you can take out a certain amount of your home’s equity without having to make any monthly payments. You may accept the funds in three ways (or a combination).
· A lump sum payment for the entire amount,
· a monthly payment option with an unlimited time frame, which would pay you around a certain amount a month,
· and the third is to put the amount in a line of credit.
Any amount that is initially deposited in the line of credit is not charged interest (the current rate for the HECM 250 is 2.99%) until it is utilized. This credit line functions like a checking account. You may remove any amount at your discretion and the amount you remove from the line of credit is, at that point charged the current interest rate. All of the funds that remain in the line of credit are not repaid. The funds are still classified as equity in the home. The amount remaining in the line of credit will also experience a growth rate that is guaranteed to remain at ½ point above the interest rate (it is currently at 3.49%).
Some things to remember about a reverse mortgage:
· There are never any payments required while you live in the home, and it is a no pre-payment-penalty loan.
· You never transfer title or ownership of the home and may sell at any time.
· There is no credit, income, or medical requirements for this product.
· The funds generated are tax-free and do NOT affect Social Security or Medicare.
· There is complete Right of Survivorship.
· The entire program is regulated and guaranteed by the Federal government through HUD.
· Since there are never any payments required, there is never any chance of default or foreclosure.
The Reverse Mortgage is a no pre-payment penalty loan so you may pay back any or the entire amount at any time. The Reverse Mortgage will be paid back at the end of the loan, either if you sell the home or you remain in the home for the rest of your life. If you choose the latter, the home will pass to your heirs and they can either sell the home, repay the balance, or refinance the amount if they would like.
I am an expert in REVERSE MORTGAGES and have helped senior homeowners refinance their homes to make ends meet or make their life more enjoyable with a secure future. Just give us a call at toll free at (888) 973-8377 for a FREE, NO OBLIGATION ESTIMATE of the funds available to you!
