The FHA maximum claim amount for HECM reverse mortgages has been $625,500 since 2009. It is scheduled to decrease to $417,000 on December 31, 2011 unless Congress votes to extend it. This means many older home owners in the Bay Area will receive substantially less money if they begin the reverse mortgage process next year. For example, a 75 year old homeowner with a home valued at $625,000 would now get approximately $433,000 from a reverse mortgage. On January 1st, that same $625,000 home will provide only $289,000 or $144,000 less.
If you are considering a reverse mortgage in the near future, it may make sense to start the process sooner than later. Interest rates are at historical lows and the scheduled lowering of the lending limit from $625,500 to $417,000 can mean significantly less money from your reverse mortgage if you wait until next year.
In most cases, there are no income or credit score requirements to qualify. You must be 62 or older. At a time when it may be difficult to qualify for a conventional loan, a reverse mortgage can be a great solution. If you would like a free customized quote on a reverse mortgage, please call David Chee, Branch Vice President and Certified Public Accountant at Security One Lending, 1-800-967-3575. NMLS ID#263222, DRE#01714617