New Reverse Mortge Law Raises Lending Limits - Huge Difference
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.
Those helped most by the new law are those with homes valued over the former lending limits. Banks will loan these homeowners up to twice the amount as before the law's enactment. Even better, lender fees are reduced as a percentage 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.
There is no telling when Mrs Johnson's flooring business will return to pre-2008 levels. It is a big unknown? Based upon this she opted to move forward with a reverse mortgage that completely eliminated her monthly mortgage payment. She still has a mortgage but the monthly burden is gone.
Many myths surround the reverse mortgage. One such myth is that in order to get a reverse mortgage the borrower must own their home free and clear.
The facts paint a different picture. Even before the new law came into effect most reverse mortgage customers were getting reverse mortgages to pay off an existing mortgage. In effect the reduction in mortgage payment is a net increase in income.
With the new lending limits in place many senior borrowers will realize a dramatic increase in their monthly income. Technically speaking they won't see income increasing, rather the giant expense of the mortgage payment will be eliminated. The borrower sees that as a net increase in disposable income to be used for other important life reasons.
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.
Those helped most by the new law are those with homes valued over the former lending limits. Banks will loan these homeowners up to twice the amount as before the law's enactment. Even better, lender fees are reduced as a percentage 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.
There is no telling when Mrs Johnson's flooring business will return to pre-2008 levels. It is a big unknown? Based upon this she opted to move forward with a reverse mortgage that completely eliminated her monthly mortgage payment. She still has a mortgage but the monthly burden is gone.
Many myths surround the reverse mortgage. One such myth is that in order to get a reverse mortgage the borrower must own their home free and clear.
The facts paint a different picture. Even before the new law came into effect most reverse mortgage customers were getting reverse mortgages to pay off an existing mortgage. In effect the reduction in mortgage payment is a net increase in income.
With the new lending limits in place many senior borrowers will realize a dramatic increase in their monthly income. Technically speaking they won't see income increasing, rather the giant expense of the mortgage payment will be eliminated. The borrower sees that as a net increase in disposable income to be used for other important life reasons.
About the Author:
For solid answers regarding the reverse mortgage (I know it says Texas but the principles work everywhere), go to Free Downloadable Texas Reverse Mortgage Guide. Another excellent resource is Knowledge Bank for the Texas Reverse Mortgage.
posted by Debt Consolidation Loan at
2:09 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home