Reverse mortgages are for older homeowners – the owners are allowed to mortgage their home for cash or for monthly income, all according to a formula based on the owners ages and the home value. The lender does not need to be repaid as long as the borrower continues to live in the house.
One of the provisions in the housing bill just approved by Congress, awaiting President Bush’s signature, is an increase in the maximum mortgage amount for a reverse mortgage – it is more than doubling to $417,000. In some high cost areas of the country the amount can be as high as $625,000.
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