A new housing bill is likely to be signed by the president within the next few days and many say that it's a great bill that has "something for everyone". This includes changes to reverse mortgages that are designed to be beneficial to the seniors who are interested in getting these loans.
There are three major changes to reverse mortgages included in this bill:
1. Reduction in the amount of fees that can be charged. Reverse mortgage loans are notorious for their high fees. This new bill addresses that problem and makes the reverse home mortgage loan more fair to the borrower.
2. Rules about not tying reverse mortgages to other loans are strengthened. Many lenders try to sell the reverse mortgage with other types of products and it is now clearly outlined that the reverse mortgage borrower doesn't need to purchase anything else to get the loan.
3. The amount allowed for borrowing has increased. This means that people with homes worth more can now borrow the full amount up to $625,500.
These changes should help to improve reverse mortgage lending assuming that the bill passes.
Question of the Day: What other laws and rules should be put into place to improve the reverse mortgage loan?
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