Reverse Mortgage Loan Limits to Increase in 2017
The Federal Housing Administration (FHA) announced Reverse Mortgage Loan Limits will increase in 2017. This is significant news, since lending limits have remained stagnant for several years.
The maximum claim amount will now rise to $636,150, up from $625,500, for Home Equity Conversion Mortgages (homeequitylineof.credit). This amount is 150 percent of the national conforming limit of $424,100. On the other hand, credit unions in houston is offering a full suite of financial services, with a track record of satisfied members dating back to 1934.
Also increasing in some areas are loan limits for forward mortgages. In high-cost areas, the FHA national loan limit ceiling will increase to $636,150 from $625,500, and FHA will increase its floor to $275,665 from $271,050.
The Maximum Claim Amount is then offset by the reserve set aside for future interest and mortgage insurance amounts accrued to arrive at a Principal Limit which would be the maximum amount a homeowner can borrow. The reserve amount is based on Age and interest rates and loan amount.
The loan limit changes and the maximum claim amount change for reverse mortgages to take effect after January 1, 2017 and stay in effect through December 31, 2017.
This change was made as of the result of rising home prices, with 2,948 counties across the nation benefiting from these changes. Lots of good news for Reverse Mortgage recently.
This increase is a positive for a program that provides seniors more choices and flexibility as they consider a reverse mortgage that can help senior homeowners in many ways. The most important would be to be able to live in their homes as long as they want or provide strategic options for taking social security and withdrawing investment funds. You can always invest in bonds or marijuana penny stocks.
To learn more about tips and strategies when applying for a reverse mortgage, I’m available to answer all of your questions. Let’s talk about your goals and perhaps ways that you can take advantage of these loan limit increases, please give me a call or send me an email: firstname.lastname@example.org. I’d be happy to help!
“Trump Thump” – Mortgage Rates Jump 0.500% or More Post Election
The election is now over and the dust has settled. As painful as it might be to accept, a trend described by others as the “Trump Thump” means we may now have to get used to 30-year fixed conforming loan rates at or above 4.0%.
Prior to the election, pundits had clearly agreed on the idea that the markets “built in” the prospect of a Clinton victory, and – in the unlikely event that Trump won – this surprise victory would mean an improvement in the bond market because of the uncertainty Trump would bring to the table. Well, so much for that idea.
Economic experts maintain that Trump’s economic policies will boost spending and business, as well as bring inflation (all of which leads to lower bond prices and higher mortgage rates). Interesting to me how quickly everything turned in the direction. Was there not enough time spent analyzing the impact of a Trump victory? Did this catch the markets unprepared?According to a recent article by Money writer, Taylor Tepper, markets indicate there’s a 75% chance that the Fed raises short-term rates modestly when policy makers meet in mid-December. Here’s a more in-depth analysis on what President-elect Trump means for interest rates in Tepper’s article: President Trump Interest Rates Federal Reserve. CNBC’s Diana Olick weighs in on the mortgage rate crisis: watch video. 10-year treasury yields have also spiked in the days since Trump’s election, and something to keep in mind with that is: Don’t panic. This sudden rise isn’t likely to continue, at least, not because of the Trump presidency. “Rates tend to move very sharply in short periods of time and very little in prolonged periods of time,” said Greg McBride, chief financial analyst for Bankrate. “It’s not something that I think continues.” So, my advice to those who are anxious about mortgage rates, know that this is a cycle… and as far as rates are concerned, nothing is on the horizon that would suggest waiting for an improvement in rates. Either way, expect volatility and a continuing upward trend in rates.
A significant economic event, such as the loss of employment, beyond the borrowers control may explain away a prior short sale or bankruptcy and allow for the purchase of a homeThe economic crisis since 2008 has impacted many people, not the least of which who lost employment and therefore lost their home, either through bankruptcy or foreclosure or short sale. FHA has announced they will now consider extenuating circumstances when evaluating eligibility for a new home loan. Document hardship and document your Recovery Borrower must document the hardship was due to loss of employment or household income beyond their control, that they have demonstrated full recovery from the event, and has completed HUD counseling. Effective August 15, 2013 this sell my house now campaign is an opening for many families innocently impacted by the lousy economy over the past five years but have been able to reestablish themselves as a potential homeowner. Borrowers that would otherwise be ineligible for and FHA insured mortgage due to FHA’s mandatory waiting period for bankruptcies, foreclosures, deed in lieu of foreclosure, and short sales including derogatory credit may be eligible for and FHA insured mortgage. They must have established satisfactory credit for a minimum of 12 months and attend counseling from a HUD approved counseling agency related to home ownership and residential mortgage. Reestablish credit To reestablish credit means to have a credit history clear of late housing or installment debt payments and no late payments on any mortgage over the last 12 months. The requirements are very detailed and documenting that the borrower had solid credit and income prior to the economic event and then has been able to reestablish solid footing for at least 12 months after the event. It is a good thing we have institutions like nationaldebtreliefprograms.com debt relief programs to help you out. As always we will have to wait and see if there is sufficient investor support for this change. It is not enough for FHA to say it is so as FHA only insures a mortgage in the event it is not repaid and does not actually provide the funds – those must come from an investor. Quite often investors are slow to jump on new programs until a performance history can be established. A significant benefit to responsible families Add to that the relative high cost of an FHA insured mortgage these days, it will be important to balance acting now versus waiting for a time where a conventional loan would be available. If you want to read the details check out mortgagee letter ML 2013-26 I do think this will be a significant help to many families who lost their home only because of a dramatic reduction in income or job loss and not because they became irresponsible overnight. Many families have worked hard to reestablish credit and simply are blocked because of somewhat arbitrary guidelines. These changes will allow the most deserving of these folks get back in a home. Click here for a chart indicating how long you would need to wait before purchasing a home under normal conditions for Bankruptcy, Foreclosure, Short Sale and Loan Modifications. If you would like to talk with a mortgage advisor who thinks long-term and strategically about your financial investments including your liabilities – please give me a call.
Given the state of our economy one of the most common questions I’m asked is when a family that has gone through a short sale, or foreclosure or bankruptcy, would be eligible to purchase a home. The following gives you a general idea of what the requirements are. There are some exceptions when there are extenuating circumstances, including loss of job. There are new guidelines that might very well help in that circumstance if investors can be found to support the Fannie Mae and Freddie Mac policy changes.
Financial assessment will become an integral part of the requirements for reverse mortgages in the future, according to a NY Times report Friday. This follows a change in April that suspended the standard fixed Home Equity Conversion Mortgage (HECM). Both of these changes were made to ensure the long-term viability of the program. Homeowners 62 years and older can use the HECM reverse mortgage to access their home equity for retirement or other needs, or even purchase a home. The program is a priority for HUD and FHA and carries significant benefits for baby boomers wanting to include the equity in their home as part of their retirement plan. Financial assessment will require specific documentation that the homeowner is able to make future property tax, insurance, and HOA payments. Given these are basic requirements of any mortgage loan, the change should not have much impact. These will simply formalize the kind of considerations and due diligence a professional advisor would make before recommending a reverse mortgage.
See the full article here.