Changes to the Laws for Reverse Mortgages

Homeowners who are at least 62 years old can borrow against the equity in their homes using a reverse mortgage. Instead of having monthly mortgage payment, they would not have to pay the money back unless they sell, move somewhere else or pass away. In order to get a reverse mortgage, one must own the home or have a rather low balance left on a mortgage.

Once it has been arranged, the borrowers can get the loan money in several ways: as a lump sum, in fixed monthly installments or as a line of credit that they can tap into at will.

This year's Housing and Economic Recovery Act has altered the rules for reverse mortgages in an attempt to help seniors who may need such a mortgage to buy long-term health insurance or to increase their incomes. The loan amount has been increased and there is special consideration for those who live in areas where the cost of housing is above average.

You can visit the National Reverse Mortgage Lenders Association website to learn more.