New reverse mortgage loan limits have been raised and lender’s fees have an absolute maximum charge of $6,000.
New Changes with Reverse Mortgages
The government has shown concern over the loan limits and the fees charged for reverse mortgages in this type of mortgage relief program. Congress became involved in the guidelines for these FHA backed senior mortgage loans and made positive modifications. Information concerning the current mortgage lending limits can be accessed through participating lenders. Some lenders are now providing larger ‘jumbo mortgages’. These new mortgages are offered for higher mortgage limits, and have much larger fees that lenders charge to offset the additional risk involved.
Additional Changes with Reverse Mortgages
Congress also addressed the fees that were being charged by lenders. Since this program is for senior homeowners, the government wanted to ensure that the service charges were in line with acceptable charges. The loan rates were revamped, and on a $200,000 loan, a 2% fee is charged. An additional 1% fee is added for all amounts over the $200,000 price with a new $6,000 maximum fee. These revised guidelines are to protect older homeowners and to ensure that these reverse mortgages achieve what they were intended to give senior homeowners; financial freedom during their retirement years.
Overview of Reverse Mortgages
Reverse mortgages are designed to take the financial burden off of older homeowners living on fixed incomes. Pensions and Social Security checks are many times insufficient income to pay for the costs involved in aging. Extra medical expenses, higher insurance premiums and prescriptions co pays are a financial problem for millions of older citizens struggling to pay for customary living expenses. This program offers senior property owners the peace of mind to live in their home by accessing supplemental income that is provided through a reverse mortgage.
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