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Higher Loan Limits Lift Ceiling on Reverse Mortgages

  • January 20th, 2006

New federal loan limits mean that older Americans may be able to get more out of the equity in their home through a reverse mortgage. If you own a home and are at least 62 years old, you may be able to get a reverse mortgage on your home. A reverse mortgage permits house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home, or for nursing home care later on.

The amount of money you can borrow under a reverse mortgage depends on your age, the current interest rate and other loan fees, the value of your house, and the mortgage limits for your area set by the Federal Housing Administration. At the beginning of the year, the FHA raised mortgage limits in many parts of the country. The loan limit for homes in high-priced areas has increased from $312,896 to $362,790 while the lowest loan limit has increased from $172,632 to $200,160. To find the limit in your area, click here.

Homeowners can get the money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn on at the borrower's option, or in a series of regular payments, called a 'reverse annuity mortgage.'

For more on reverse mortgages, click here.

Local Elder Law Attorneys in Ashburn, VA

Margaret O'Reilly

Margaret A. O'Reilly, PC
Herndon, VA

John Laster

Law Offices of John L. Laster
Falls Church, VA

Mindy Felinton

Felinton Elder Law & Estate Planning Centers
Rockville, MD

Last Modified: 01/20/2006

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