As part of President Obama’s 2009 Stimulus Bill and Economic Recovery Act, HECM (Home Equity Conversion Mortgage ) i.e. “Reverse Mortgage” FHA Appraisal Limits have been raised 150% from their current limit of $417,000 to $625,500. This is now law, as of February 18,2009.
Banks cannot originate them as of yet, HUD Must issue a Mortgagee Letter, which will outline the plan in greater detail. Hopefully, this will be issued in 30 days or less, and may have been done by the time you read this article. However, in the past, Mortgagee Letters have taken anywhere from 30 to 90 days. Hopefully, we will see the letter soon, as this limit has a “Sunset Provision”, which means it will expire on Dec 31, 2009, unless Congress extends the limit.
This means that those who have more expensive Homes will be able to use a greater amount of their value when taking out a Reverse Mortgage. This provision should help those especially in CA, FL, NY, WA, HI, NJ, & NY. This provision allows the FHA Limit to come more “in line” with actual home values. I Live in NC, and we have many homes , especially closer to the water and Mountains, where values are higher as well.
A Federally Insured Reverse Mortgage is when a bank or financial Institution pays the owner for the accumulated equity in a home. Borrowers must be at least 62 years of age, must be their primary residence, and have sufficient equity. There is no Income or Score required
Funds can be taken in a Lump Sum, Credit Line or Line of Credit, Monthly, or some combination. The Borrower retains title and ownership, and makes no payments while living there. Funds can be used for any purpose. When the home is sold, the Reverse Mortgage balance, plus any fees, and accrued interest are paid at that time. Any excess equity belongs to the seller or their estate. The home must be sold when the last borrower has vacated the home for a period of 12 months or passes away. A home can even have a mortgage on it, and the Reverse Mortgage can pay that one off and eliminate payments, provided there is sufficient equity.
This means there is a “Window of Opportunity” for those that have homes valued over the previous limit of 417K, and would qualify for a Reverse Mortgage.
Anyone who is over the age of 62, and has equity in their home, owes it to themselves to look into a Reverse Mortgage. A home is considered “Dormant Equity”, and a Reverse Mortgage can help free up Cash Flow and Retirement Funds for those who qualify. Many who are house rich and cash poor can benefit from this. Even if your Income and Cash Flow are OK now, you should consider getting a free analysis from a trusted Senior Advisor. It has been said that under the age of 65, a home is your greatest financial asset. Every year after 65, it becomes a greater liability. A Reverse Mortgage, if Implemented properly, can turn your home into a liquid asset, while still allowing you the use and enjoy all the benefits and comforts of home ownership, without the stress and worry.
A Federally Insured Reverse Mortgage can provide a Line of Credit for future financial planning, should you need it.
Let’s say a couple in their 70’s, own a home free and clear, that has an appraised value of $600K. Our hypothetical couple would like to sell, but may need to stay in their home a few more years. The Couple is finding it more difficult to pay the Insurance and taxes.
Using the newly Implemented guidelines, they could very easily access the home in the 400K range, either as a lump sum, line of credit, or monthly. That’s a lot of cash. Even if they don’t need all of it, they might consider taking some cash out, and leaving some in a LOC for the future. A strategy might be to allow the credit line to grow, and remove the growth each year to use for expenses, while keeping the LOC intact. The amount removed now becomes part of the Reverse Mortgage.
Our hypothetical couple, should they decide not to take out the Reverse, might miss a “Golden Opportunity”, should the provision expire. They could still take one out, but at the lower loan limit amount, their leverage would be greatly diminished.
If you or someone you know is aged 62 +, make sure they check out a Federally Insured and Government Guaranteed Reverse Mortgage.
Wes Hudson is a Senior & Reverse Mortgage Loan Advisor in Wilmington NC. His website is http://bit.ly/1vx9tht. You can reach him directly 910-262-4083. Email: SeniorReverseMortgages@yahoo.com
from WordPress http://bit.ly/1vxx3LP
via IFTTT
No comments:
Post a Comment