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Reverse Mortgage Rules Change

A reverse mortgage is a loan against your home if you are a senior citizen that doesn't have to be paid back as long as you live in that house. using home equity to finance retirement years is growing in popularity. Under the new US law, the amount a senior can borrow through a reverse mortgage has been increased to $417,000 that can increase to as much as $625,500 in high-cost areas. The new law also reduces fees on reverse mortgage loan. The origination fees lenders can charge are currently capped at 2 percent of your home's value or the county lending limit, whichever is lower. The housing bill recently reduced the maximum fee to 2 percent on the initial $200,000 of the home's value and 1 percent on the balance thereafter, with a cap of $6,000. Reverse mortgage lenders are prohibited from requiring borrowers to purchase insurance, annuities or other similar products as a condition of getting a loan.

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