Miami Reverse Mortgages & Statistics
By Michael Branson
Miami is the county seat of Miami-Dade County and is the single most populated county in Florida. Miami's population is just over 409,000, making Miami the largest city within the Miami metropolitan area. According to a United Nations estimate, in 2007 Miami had become the fourth largest urbanized area in the country, behind New York City, Los Angeles, and Chicago.
According to Forbes Magazine, in 2008, Miami was ranked as "America's Cleanest City" for its year-round good air quality, vast green spaces, clean drinking water, clean streets and city-wide recycling programs. In 2008, Miami was also ranked the 3rd-richest city in the United States and the world's 22nd-richest city in a UBS study, but this still does not eliminate the need for Reverse Mortgages in the area.
The HUD Home Ownership Center (HOC) is located in Coral Gables, just outside of Miami and it consistently insures more Home Equity Conversion Mortgages (HECM's) than any other HOC in the nation. Even with this large number of HUD HECM's, Miami/Dade County is also home to some extremely high dollar cities including beach communities with larger and more expensive properties. These senior homeowners often opt for jumbo or proprietary reverse mortgage programs which are not included in the HUD numbers.
Miami Reverse Mortgage Limits
The implications are unclear at present as to the effect that H.R. 3221 will have on the Entire Florida market as many of the area of Florida currently receive lower lending limits under the HUD guidelines. There are three possible scenarios under this bill. HUD will publish their limits within days (the Bill was signed into law on 7/30/2008) and once the limits are published, Miami residents will be eligible for increased amounts under the HECM program.
A reverse mortgage uses actuarial tables much the same as insurance products and borrowers receive more money the older they are. Therefore, a 62 year old borrower just meeting the age requirement will receive much less cash than a 78 year old borrower with the same $400,000 home. When borrowers do not take all their funds at the beginning of the loan and choose to use the line of credit option, the line of credit grows annually on the unused portion as the borrower would be eligible for a higher loan amount at the increased age.
Some borrowers have asked whether or not they should wait for a few years to apply until they are older to take advantage of higher principal limits for older borrowers. Only you and your trusted financial advisors know your situation but there are other factors which go into the determination of how much money you will receive on a reverse mortgage which also include interest rates and property values. If your property value declines, you may be eligible for less money. If the interest rates rise from their current near-historic low levels, then you may also be eligible for less money.
The other factor that changes on which we have already seen several changes this year alone is the margin. The margin is added to the index to determine the final rate you pay and margins have risen this year as uncertainty has grown in the mortgage secondary market. When the margin rises, your ultimate rate increases and you will receive less money.
The only constant is your age, you do know how old you are and you do know when your next birthday is. No one can predict the future with interest rates or property values. If the values rise considerably, you can refinance a reverse mortgage and the HUD insurance does not need to be paid a second time you would just pay the difference, if any, from your old premium amount to the new premium based on any increase in the principal lending limit in your area.
Speak to a Florida Approved Reverse Mortgage Lender to help you with answering all your questions and if the reverse mortgage is right for you, closing your loan quickly and easily.
About the author
Michael G. Branson (CEO All Reverse Mortgage Company)is a Mortgage Broker who has over 31 years of mortgage banking experience. Toll Free (888) 801-2762
Miami Reverse Mortgages
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