Makeover Possible For Reverse Mortgages

A housing bill going to the US House of Representatives may allow seniors a better deal when it comes to reverse mortgages. The program is already popular with senior citizens, but the current legislation would make improvements to current programs, including an option that would allow borrowers to take out more equity. The Act would create a national loan limit for the Home Equity Conversion Mortgages, which accounts for more than 90% of all reverse mortgages; current limits are determined by county.

The Act would limit the loans to the national limit set by Freddie Mac, currently at $417,000, allowing seniors to draw almost double the amount of equity available to them at this time. A purchase option is also being presented, to allow seniors to purchase a new home that better suits their needs. The number of HEMC loans that FHA can insure would also be increased, freeing up a greater amount of loans to be given. Overall, the benefits of the Act would help owners obtain a better retirement through their current home equity.