If you are a senior living in Arizona and considering a reverse mortgage, be sure to thank the new housing law for increased options, flexibility and lower fees to get into a reverse mortgage. Some of the big changes in the bill include new loan limits for reverse mortgages, reduced costs to obtain a reverse mortgage and some protection from predatory sales practices.
New loan limits for reverse mortgages
The new maximum amount for a reverse mortgage has been upped nationwide to $625,500 — which replaces the old limits which ranged from 200,160 – 362,790 depending on where the borrower lived. Quite simply, seniors can now borrower more than $250,000 more than they could before the bill passed.
Reduced costs to obtain a reverse mortgage
With the passing of the bill, origination fees are reduced to 2% on the initial $200,000 and 1% on the remaining balance with a cap of $6,000. So as an example, if you take out a $400,000 reverse mortgage you will now pay $6,000 where under the old law, you would pay $8,000.
Protection from predatory sales practices
Loan officers who help people obtain reverse mortgages are now prohibited from selling other financial and insurance products. The law also prohibits tying the purchase of insurance or other financial products to taking out a reverse mortgage. Now if you are shopping for a reverse mortgage, you can be assured that you will only end up with a reverse mortgage and not a reverse mortgage and a portfolio of other financial products at the same time.
Do you live in Arizona and considering a reverse mortgage? Are you interested in learning more about how an Arizona reverse mortgage could benefit you? Call us — we are Arizona reverse mortgage specialists — or — you can start here.