"God Bless the Dream, the Dreamer and the Result." 

Monday, December 8, 2008

New Reverse Mortgage Rules Help Homeowners

Reverse mortgages—which allow older homeowners to borrow against their equity without paying it back, as long as they live in the home—have risen in popularity since the federal government raised the limit on borrowing, the Seattle Times reports. The old ceiling for owners 62 and up was about $352,000; the new one, $417,000.

One mortgage officer, who said more calls are coming in, explained that homeowners want to use "the equity in their home instead of selling their portfolio in a bad time." During the mortgage crisis, private lenders and Fannie Mae cut back or stopped providing reverse mortgages. Now, the FHA is the biggest game in town. "It's going to allow those people who own higher-priced homes to access a lot more of the equity of their homes for whatever need they may have," one expert said.

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