FHA Increases Proceeds for Many Borrowers

Starting October 4, 2010, HUD is also lowering the effective interest rate floor from 5.50 to 5.00 percent. Because interest rates are so low, many reverse mortgage borrowers will receive more money than previously available, despite the principal limit reductions.

According to IBIS Software, a 70-year old borrower with an expected interest rate of 5.06% or less will receive $10,750 more on a $250,000 home compared to the previous principal limit factors.

Reverse Mortgage Applications Surge 39% in September

Reverse mortgage applications rose to the highest levels all year in September, up 39.1% from October according to a report from the Federal Housing Administration.

In September, 5,966 HECM loans were insured, with 5,587 being traditional reverse mortgages and the remainder as refinance or purchase transactions. For the year,79,106 HECM loans were endorsed with a max claim amount of $21.1 billion.