Huge Impact - New Reverse Mortgage Lending Limit Increase
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 new law allows homeowners, 62 years and older, to borrow as much as twice the amount as formerly possible. Additionally, the law provides for a relative reduction in closing costs for homes valued above $200,000.
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.
With many unknowns in the commercial marketplace, she is unsure when her income will return. With that in mind Mrs. Johnson exercised the option to completely eliminate the burden of her mortgage payment by refinancing her home with a reverse mortgage.
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 new law allows homeowners, 62 years and older, to borrow as much as twice the amount as formerly possible. Additionally, the law provides for a relative reduction in closing costs for homes valued above $200,000.
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.
With many unknowns in the commercial marketplace, she is unsure when her income will return. With that in mind Mrs. Johnson exercised the option to completely eliminate the burden of her mortgage payment by refinancing her home with a reverse mortgage.
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:
Discover more solid information at theMortgage Pro's Guide to the Texas Reverse Mortgage. Another source for informations is the Reverse Mortgage of Texas Info Depot.
posted by Credit Counseling at
2:16 PM
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