I don’t know the value of your home currently, but many houses have seen significant amounts of appreciation since 2006. As I told you, HUD has raised the Lending Limit (or Maximum Claim Amount) to a current limit of $1,089,300 starting in January 2023. However, I may be able to offer a ray of hope. Without knowing how much you owe on current liens at the time and how much you drew from the loan annually, I could not give you a helpful comment on whether, realistically, there would be any money left on the original line. Otherwise, the system cannot account for draws and numbers about which it has no information. The amortization schedule you received with your loan when you first signed your documents would have shown you how long the line would last and how the balance would rise, but only if you advised your lender how much you planned to draw yearly so they could run that number for you. Just for the record, though, I have seen several simulators where the funds available to the borrower exceeded the original maximum claim amount, but that was in the case of borrowers who had no liens to pay off and allowed the line to grow for 6 to 7 years with no draws whatsoever. This growth of the line allowed you to ultimately borrow more total dollars than if you had borrowed all your available funds at one time…although even with the growth in the line of credit, you may not be able to borrow to your Maximum Claim Amount. The benefit amount or your loan amount is also known as the Principal Lending Limit, and this is the amount you receive based on your parameters.įrom this Principal Lending Limit, you would subtract any mortgage or other liens you had to pay off, any costs you incurred for the loan, and the remaining funds would be available for you to take as a lump sum, as a monthly distribution, to leave in a line of credit and take as you desire or as a combination of any or all of those options.ĭepending on how quickly you used the loan in the early stages, the balance available grew over time on the unused portion. If you had a Maximum Claim of $250,000 at the time you took out your reverse mortgage, that would mean that your property either appraised for that amount or that was the HUD maximum for your area at the time (if your loan closed before the nationwide move to a $417,000 maximum claim amount). Your home can be valued higher, but that is the most that will be considered for the reverse mortgage benefit or loan amount. It is set to increase again in 2023 to $1,089,300.īut again, those are the maximum claim amounts and not the loan amounts that borrowers receive when they get their loans, and it is not the maximum your property can be valued to be eligible for the loan. We now know that the “temporary increase” because of the American Recovery and Reinvestment Act of 2009 remained in effect until property values increased enough so that the HUD limit grew above and beyond this level with home appreciation to the current level of $970,000. The Maximum claim on the reverse mortgage in 2021 would have been the lower property value or the HUD lending limit, not the maximum amount you can borrow. You use the term “Maximum Claim” and give $250,000. I would be happy to go over your individual information with you.įirstly, there are a lot of terms with a reverse mortgage that is not like or even used in a standard or forward mortgage. If you have family or others who can finance the payoff of the reverse mortgage, they may be able to carry the remaining balance until the lot is split and the sale of the excess land is.Without seeing your closing documents or even your Loan Comparison Page, I can only guess what is going on here but let me take a stab at it, and if this does not seem to come anywhere near your circumstances, please feel free to contact me. You could use a combination of payments and then refinance simultaneously with a lot split and sale of excess land to eliminate the liens or have a very small conventional loan remaining on the new smaller lot and improvements. I think you would have to be able to pay the loan in total if you planned to sell a portion of the land to pay off the loan because I do not believe a lender or HUD would modify the loan with a partial reconveyance in such a way. I do not believe they would participate in a partial reconveyance since the loan is sold into a security, and they may not be able to do it. If you wish to sell some of the land encumbered by the reverse mortgage without paying the loan off, that will require a partial reconveyance by the lender and HUD’s participation. You can make payments, pay it off in “chunks,” and pay it all at once it’s entirely up to you and your finances. You can pay off your reverse mortgage in whole or in part at any time with no prepayment penalty.
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