Higher Reverse Loan Amounts
Effective this month and year, the HUD Lending Limits for FHA Reverse loans were increased from $765,600 to $822,375.00
This is quite a large increase over previous years and could possibly make a difference for senior borrowers who will now have more access to their home’s equity, than they would have had last year in 2020.
The Lending Limit caps a home’s value at this figure, even if a property is worth more, the reverse loan amount will always be calculated on the Lending Limit or the appraised value of the home, whichever is less and the age(s) of the youngest borrower.
For some seniors, this increase can make it now possible to do the loan, because the higher value will possibly provide them a larger loan amount that can pay off an existing mortgage with a high balance, whereas previously, the loan may have been not been adequate enough for refinancing an existing mortgage.
Mortgage interest rates are at the lowest they have ever previously been, and that includes the interest rates on reverse loans, too. And in addition to very low rates, home values have increased substantially, creating more equity for many homeowners.
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Whether it is Fixed loan or a Line of Credit, FHA HECM, or one of the Jumbo reverse loans, now is the best time to apply for one,take advantage of low interest rates, and also the increased value of your home.
Use a reverse loan to increase your cash flow and create a safety net for the future, and have funds for unplanned expenses, and gain peace of mind.