Media Covers Reverse Mortgage Reforms
August 6th, 2008
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Great minds think alike — largely.
Kiplinger’s headline tells us that “seniors Get a Gift from the New Housing Law” while TheStreet.com headline explains that “Senior Homeowners Get Lift From Housing Bill.”
Kiplinger notes that “homeowners age 62 and older will now be able to tap a greater amount of their home’s equity. The maximum amount for a reverse mortgage has been upped nationwide by more than a quarter of a million dollars, to $625,500. That flat limit replaces the old rule that set limits from $200,160 to $362,790 depending on where the borrower lived.”
TheStreet.com says that “now there will be a higher borrowing level on FHA reverse mortgages — with $625,000 of home value as a cap, and a $417,000 borrowing limit. Fees will be capped at 2% of the first $200,000 borrowed, and 1% on the balance — with an absolute maximum of $6,000 in fees.”
Both stories are good, but the Terry Savage column on TheStreet.com is the better of the two because it goes into far more depth about reverse mortgages generally.
For the full story, see:
Seniors Get a Gift from the New Housing Law
and
Senior Homeowners Get Lift From Housing Bill
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August 7th, 2008 at 12:36 pm
Perhaps Savage is better. But, there is an error. The new FHA RM says that the new home maximum (so far)is $417,000 across the country (not county by county), and that in high-cost areas they may be able to go up to $625,000 home value…as compared to $362,790, with seniors getting a percentage of that depending on age and interest and value of their own home.
But it hasn’t been decided whether or not the $625,000 is there - or whether or not your area is at $417,000 or $625,000….or at 115% of the median priced house, or whether there will be graduated levels of maximum home value caps.
And $417,000 is not the “borrowing limit”. The limit, if we get a $625,000 cap will be based on your age, interest rate and value of the home….so if a house was worth $700,000 and you were eligible for a 70% loan you’d get $490,000… because that’s lower than $625,000;and normally a $700,000 home would be in a high-cost area.
August 25th, 2008 at 8:31 pm
This is a simple question My home is worth app $800,000 in Middlesex County Massachusetts, int the town of North Reading.
What is the maximum cap for my house. I understand a percentage factor depending on age , BUT WHAT IS THE NEW CAP AND WHEN DOES THE LAW BECOME EFFECTIVE AS I AM COSIDERING A REVERSE FOR MY HOME
Thank you