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Written by Jamie Simpson, LawServer Attorney-Editor
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Last Updated November 19, 2008 |
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Reverse mortgage lenders are expecting demand to rise after the U.S. Department of Housing and Urban Development (HUD) increased the maximum loan amount for Home Equity Conversion Mortgages (HECMs) to $417,000, reports the Chicago Tribune. Experts warn, however, that these loans are not suitable for everyone. The National Reverse Mortgage Lenders Association states that HECMs allow homeowners to decrease their equity while the borrowed-against value is accruing interest. Additionally, upfront fees can reach as high as 10% of the total mortgage amount. Seniors are encouraged to carefully consider a HECM and only proceed if planning on living in the home for at least the next three to five years.
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