Reverse Mortgage Lending Limits Set to Rise in ...
Reverse Mortgage Lending Limits Set to Rise in 2018
Reverse mortgage lending limits are going up again for 2018! This is great news for seniors who need extra money for medical and other expenses. For 2018, the new lending limit for reverse mortgages climbs from $636,150 to $679,650. Not only
that, but according to a study by the Center for Retirement
Research at Boston College, reverse mortgages are safer and more streamlined than they once were, thanks to program
changes since 2013. All of this is great news for senior
homeowners ages 62 and older who are thinking of getting reverse
mortgages to supplement their incomes. Currently, the top three
reverse mortgage lenders are American Advisors Group, Seniors Reverse
Mortgage Solutions and Liberty Home Equity Solutions. Think a reverse mortgage might be right for you? Check out the following questions and answers below to learn more.
Do these lenders operate within the government's federally insured program?
Each of the top-rated lenders participates in the government's Home
Equity Conversion Mortgage program. Reverse mortgages through this
program are insured, and borrowers are protected by the newest federal
rules and regulations.
How are default rates expected to change under the new reverse mortgage rules?
The Center for Retirement Research at Boston College anticipated that
default rates could fall by half because of changes to the federal
reverse mortgage program.
How did first-year disbursement requirements help borrowers?
In the past, borrowers who elected to receive all their reverse
mortgage proceeds at once would sometimes get in to trouble when they
couldn't afford the ongoing costs of taxes and insurance. Now, borrowers
can only collect up to 60 percent of their proceeds during the first
year of their loans. This has helped more borrowers to manage their
finances and continue making payments over time.
Can I be kicked out of my home under a reverse mortgage?
Lenders can't evict reverse mortgage borrowers as long as they keep
their property taxes and home insurance policies up to date. This
stability is a strength of the home mortgage program.
Can people who cannot afford a reverse mortgage get approved under the current regulations?
Predatory lending was a major problem in the past, and reverse mortgages earned a bad name in the mortgage lending industry. Since then, however, new financial regulations have reduced the
likelihood of predatory lending. Today, customers who apply
for reverse mortgages must go through rigorous financial screening to
make sure they can afford the ongoing costs of property taxes and home
Do these top-rated lenders have any kind of quality endorsements?
American Advisors Group, Seniors Reverse Mortgage Solutions and
Liberty Home Equity Solutions are all members of the National Reverse
Mortgage Lenders Association. Being part of this association means
committing to working with borrowers in ethical, responsible ways. These
lenders also hold high ratings with the Better Business Bureau.
How long will the new lending limits last?
The new lending limits will be in effect for 2018. Whether they remain the same or change beyond that is unknown at this point.
How did the federal government streamline the reverse mortgage program?
Many people don't know about how the reverse mortgage program was streamlined in 2013. Before changes were made, borrowers could apply for either
Standard or Saver programs. The Standard reverse program ultimately cost
more, but it also paid out better loan proceeds. Now, those two
programs are streamlined into one midde-of-the-road option, which works better for all borrowers across the board.