Sunday, September 19, 2010

FHA may slash upfront costs of some reverse mortgages

From LA Times

The agency is finalizing plans to reduce the initial mortgage insurance premium on certain loans to 0.01% of a home's value from 2%. Homeowners, however, would be able to borrow less and have to pay more per month.
Under the standard loan, the upfront mortgage insurance premium charged by the FHA would remain 2% of the property value (or a maximum of 2% of the FHA maximum loan limit of $625,500), and the principal limit would be cut 1% to 5% of a home's value, depending on the borrower's age.
For both loans, the monthly mortgage insurance premium, which is 0.5% of the mortgage balance for a traditional home-equity conversion mortgage, would increase to 1.25%.
Are these loans typically for the retiring baby bloomers?

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