The Housing and Economic Recovery Act, signed by President Bush on July 30, most notable for its mortgage bailout provisions, also included raising the FHA national reverse mortgage lending limit to $417,000.
Prior to the enactment of the new law, FHA reverse mortgage limits maxed out at roughly $200,000 for most parts of country. In November, lenders began to fund reverse mortgages with the new limits in mind.
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.
For homeowner Wilma Johnson, a part owner in a struggling commercial flooring company, the cavalry arrived just in time. At 64, her business was humming along until the commercial market slumped at the beginning of 2008. Now, jobs are harder to come by and she struggles to pay her monthly bills. Like most Americans, Mrs. Johnson's mortgage payment is her largest bill. Her $220,000 mortgage eats up close to $1,500 of her monthly take home income.
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.
A perception exists in the marketplace that the typical reverse mortgage customer owns their home free and clear and gets a reverse mortgage to supplement income.
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.
The newly enacted law has come not a moment too soon for many seniors with mortgages formerly untouchable by the old limits. With the new limits in place many cash strapped borrowers are free to pay off old mortgages with a new reverse mortgage to eliminate the monthly financial burden. - 16928
Prior to the enactment of the new law, FHA reverse mortgage limits maxed out at roughly $200,000 for most parts of country. In November, lenders began to fund reverse mortgages with the new limits in mind.
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.
For homeowner Wilma Johnson, a part owner in a struggling commercial flooring company, the cavalry arrived just in time. At 64, her business was humming along until the commercial market slumped at the beginning of 2008. Now, jobs are harder to come by and she struggles to pay her monthly bills. Like most Americans, Mrs. Johnson's mortgage payment is her largest bill. Her $220,000 mortgage eats up close to $1,500 of her monthly take home income.
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.
A perception exists in the marketplace that the typical reverse mortgage customer owns their home free and clear and gets a reverse mortgage to supplement income.
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.
The newly enacted law has come not a moment too soon for many seniors with mortgages formerly untouchable by the old limits. With the new limits in place many cash strapped borrowers are free to pay off old mortgages with a new reverse mortgage to eliminate the monthly financial burden. - 16928
About the Author:
Learn more about the reverse mortgage at Mortgage Pro's Guide to the Texas Reverse Mortgage. Another source for informations is the Texas Reverse Mortgage information and reports.
No comments:
Post a Comment