Arizona’s 12 News Channel reports that reverse mortgages are getting harder to qualify due to depressed home values in the state.
According to the article, many seniors living in the valley have seen their homes drop so much that the reverse mortgage isn’t enough to pay off their existing mortgage.
However, FHA rule changes on October 4th will help homeowners qualify for larger sums. The lowest interest rate allowed for a reverse mortgage has dropped from 5.5 percent to 5.0 because market interest rates have fallen. Hillyard says that half-point change could mean several thousand dollars more in a reverse mortgage, depending on the value of the home and the age of the borrower.
Parker Turk, a Certified Public Accountant at Sun American Mortgage in Mesa, says he has received many calls in the past ten months from people who wanted to use the reverse mortgage program but could not because the value of their home had fallen. “But with the changes the government has made over the past month,” Turk says, “the amount of money they can get has gone up–which means I want them to call me again.”