Here's one of the stimulus package benefits that should help our senior homeowners particularly. One of the problems with reverse mortgages has been the low amounts that are available in our area, where equity can be quite high.
Benefit #3 — Higher Reverse Mortgage Loan Limits
The loan limits for FHA-insured reverse mortgages have been increased to
$625,500 across the entire country - not just the higher cost areas. The previous limit was $417,000 across the country. This is especially important because the FHA program is virtually the only game in town as private and jumbo reverse mortgage programs have nearly all evaporated.
This coincides with another little-known change in the reverse mortgage
arena: the availability of reverse mortgages on home purchase transactions. This is a fantastic opportunity for senior citizens to buy a new home and live mortgage
payment-free without having to wait for their old home to sell. Seniors could also use this strategy to buy a new home and turn the old property into a rental or otherwise wait for market conditions to improve before trying to sell the old home.
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