According to sources at National Reverse Mortgage Lenders Association and HUD there are some changes coming to the reverse mortgage industry that can affect some future borrowers interested in this program. While there was quite a bit of talk in November and December about the fixed rate, lump sum program going away its been eerily quiet the past 2 weeks. The fixed rate program would allow the homeowner the largest amount of cash available to them and its been discussed as going away. It doesn't mean someone can't borrow the same amount of money on an adjustable rate version of reverse mortgages but the notion of adjustable scares those folks that associate adjustable with some of the silliness that existed in the subprime world. Today's adjustable rate reverse mortgage (FHA version) is tied to a global index, the LIBOR and its been historically low for past 2 years and even if it ticked up some, it still would be lower than some of the lowest Fixed rates currently available. PLUS there are features of the adjustable rate reverse mortgage than can actually increase a borrowers access to cash as they age in their own home through a LOC or line of credit. A $100,000 available balance in a line of credit could be $104,000 in a years time, $108,000+ in 2 years, etc. The fixed rate program was only received in a lump sum at time of loan closing so those folks only had access to THAT lump sum and unless they invested that money into something paying dividends or stock growth, that money and the loan had little other way of providing them access to additional cash.

Some believe the program was abused, too many folks took the lump sum fixed rate to avoid rate increases on the adjustable (which could happen) and that abuse puts the Mortgage Insurance fund in jeopardy (remembering that FHA reverse mortgages carry FHA mortgage insurance to cover loans that are more than property values at end of loan life). If you've been looking at home equity line of credit loans and you're over the age of 62 the reverse mortgage may be an easier way to gain access to more money (without monthly payments) or if you have a home equity line of credit that has matured and your bank is forcing a fully amortized payment (over next 10 years) and you find yourself short on cashflow because of the higher monthly payment consider the reverse mortgage to replace that loan. Many don't know this but you can make monthly or any time payments on a reverse mortgage, on your terms, at any amount you want. What a great tool to help with cash flow!

Rick Mcinturff- 240-506-4611