HUD Gets Ready to Axe Benefit Amount

Just when seniors have seen equity pour out of their homes through reduced values, HUD in all their wisdom decides to reduce the principle benefit amount by approximately 10% for all new transactions after Oct. 1st.
This information just came across our desk about 3pm. As it stands now, I am advising anyone thinking of doing a reverse mortgage to get started on their application. Of course, your senior counseling will have to be completed first.
This is a true shock to lenders and analysts are predicting that it will adversly affect about 21% of seniors doing reverse mortgages by having them possible have to bring additional money to the closing table just to pay off their existing mortgage.
My advise = contact your Senators and U.S. Representatives and sound off! I will post details as I get them.

Buy a Home Using a Reverse Mortgage

If you are planning on buying a new home, HUD has now introduced a Reverse Purchase mortgage. This HECM loan provides a maximum benefit based upon age and sales price and delivers a reverse mortgage with no monthly payments. Here is an example:

1. You plan on selling your home and want to downsize - The sale of your existing home is going to net you about $180000. You had planned to use this all to buy your new $180000 home. You are 72 years old. Instead of paying all cash, you find out your maximum benefit for a Reverse Purchase is about $88700. You put down $91300 and keep the $88700 working for you in other investments. No monthly payments!
2. You want to buy a second home to use as a vacation home. You use a normal reverse mortgage on your existing residence and with the lump-sum of equity you get, you go and pay cash for your vacation home.
3. Things have changed in your life and you need to up-size your home because it is too samll to accomodate the live-in help you want to have. You use the proceeds from the sale of your home; let's say that same $180000 as in example #1, and you use it all and add a reverse mortgage to it to come up with the ability to buy a $360000 home with still no monthly payment! Your reverse benefit allowed you to put the $180000 down and have a Reverse Purchase mortgage for the remainder.

The above examples were all estimates using the age of 72 and existing HECM interest rates. As each age is different and rates change, you need to find out what you purchase abilities would be by getting a maximum prinicple benefit analysis so that you can determine how this program will help you. Visit http://www.Reverse4HomeBuying.com for details.