Home Equity Conversion Mortgage Anti-Churning Disclosure

A reverse mortgage, or Home Equity Conversion Mortgage (HECM), can be a  great way to provide a solid financial future for yourself and your family. One thing that can make refinancing your home by doing a reverse home mortgage is if the lending limits in your area have increased. If you have had your reverse mortgage for a couple of years, it may be possible that the current lending limits could enable you to receive a lot more money. A year ago, the lending limit was raised from $417,000 to $625,500. This meant that whatever your home’s value was, you could not have received more than $417,000 for it. Now that it is raised – but only through January 1, 2010, you may be entitled to more money since the limits have been raised.

Interest rates can be a concern with any kind of loan, with a reverse mortgage loan, the higher the interest is the more that the balance will be reduced. When the interest rates on a reverse mortgage decrease, it enables you to have a cash flow longer. With the economy indicating that things might be getting better, the result could mean that your home’s value may be going back up. A higher value means that you will be able to receive more money if you refinance your HECM.

To ensure you are getting a better deal than what you already had. A government form  must be filled out by the reverse mortgage agent, called a “Home Equity Conversion Mortgage Anti-Churning Disclosure.” Its purpose is to actually calculate and record how much of a difference will be gained by the new HECM. The government dictates that you must gain at least three to five times as much as the cost that will be generated from it. There are some exceptions to this rule. If that is not going to happen, you will need to go through counseling for the HECM again

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Tags: HECM, reverse mortgage