Reverse mortgage limits are going up, will vary by region

REAL ESTATE WATCH

December 26, 2004|By Knight Ridder/Tribune

Loan limits on reverse mortgages will rise next year.

The maximum loan on a home equity conversion mortgage, the most common type of reverse mortgage, will vary by region but rise in most to $312,896 from $290,319. The next most popular reverse mortgage, the Fannie Mae home keeper loan, will top out at $359,650 from this year's $333,700.

In a reverse mortgage, the loan and interest are paid off when the property is sold. Sale of the property, during the homeowner's lifetime or later, is always considered sufficient to satisfy the debt; lenders can't take other assets. Borrowers must be at least age 62.

The big drawback is fees. A reverse mortgage can cost thousands of dollars more than a conventional one and it's important to weigh the costs, experts say.

For information, call the AARP at 888-687-2277 or visit www.aarp.org/revmort.

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