Orange County FHA, VA & First Time Buyer Loan Information: Higher FHA Reverse Mortgage Limits will help homeowners in Orange County, CA

My goal is to provide valuable information for home buyers, both First Time Buyers and Move Up Buyers. This information will be about loan programs such as FHA ,VA, Conventional Fannie Mae and Freddie Mac, Reverse Mortgages, and even Portfolio Jumbo programs. I will also touch on tax advantages of homeownership, Rent vs. Own analysis, and any other aspect of loans and home ownership that will be of interest to Orange County home buyers and homeowners.

Higher FHA Reverse Mortgage Limits will help homeowners in Orange County, CA

Last week, on November 6, FHA released Mortgagee Letter MORTGAGEE LETTER 2008-35 which announced the official increase in the national mortgage limit for all Home Equity Mortgages (HECM), which is the FHA version of the Reverse Mortgage. This increase will help eligible Reverse Mortgage borrowers in Orange County, especially in cities like Irvine, Newport Beach, Tustin, Orange, Santa Ana, and any area where the old limit was too based on home values.

The Reverse Mortgage has become more popular as more homeowners who are eligible for this loan product have taken the time to learn how the program works. There are several common misconceptions out there that have kept many people from seriously considering a Reverse Mortgage.

  • "The Lender take the house"  - this is not true. The homeowner retains full ownership of the home. A Reverse Mortgage is still a mortgage. You just don't need to make a payment, as you would on a "forward" mortgage.
  • "I can be thrown out of my home" - The homeowner can stay in the home until they either decide to move out (live with the kids, or move into a senior care facility), or until they pass away.
  • "I can owe more than my home is worth" - Even if this does happen, the homeowner still stays in the home with no payments. Generally Reverse Mortgages are at fairly low "loan to values", in order to make sure there is always equity in the home.
  • "My heirs will be against it" - Experience shows hat heirs are in favor of Reverse Mortgages. Many times the heirs may need to be educated on how a Reverse Mortgage works as well.

Once a homeowner turns 62 they are eligible. A Reverse Mortgage will be the easiest loan they ever applied for. Because there are no payments, the lender doesn't care about credit or income. The loan is completely based on the value of the property and the age of the homeowner.

Loan proceeds are tax free and can be paid out in a few different ways. Either they are paid out in a lump sum, monthly payments, a line of credit, or any combination.

I've actually been getting calls from homeowners who wanted to try and get their loan "modified" because they were having a tough time making their payments. After finding out they were eligible for a Reverse Mortgage, and with some education on how it works, they have been thrilled to eliminate the mortgage payment expense from their monthly budget.

This is a great option for Seniors to consider. For more information or a free analysis to see how much you will qualify for, please contact Tim Storm @ 949-829-1846, or click here.

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Comment balloon 2 commentsTim Storm • November 13 2008 06:54PM


Great information Tim, this is a pretty major change in the HECM.

Posted by Fred Chamberlin, Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant (Guild Mortgage Co - Oak Harbor WA) over 10 years ago

Thank you Fred. I noticed you are also writing on the with Mark Madsen. I've read your posts on Reverse Mortgages and they are very informative as well. I'm sure we'll talk soon.

Posted by Tim Storm, Orange County FHA and VA Home Loan Specialist (Fairway Independent Mortgage Corporation) over 10 years ago