Reverse mortgages can solve income problems and limit is now up.

For those who have equity in a home and are 62 or older, the so-called reverse mortgage can be an effective generator of income, which can be used to pay off debt or for living expenses. Usually these mortgages are used to provide a regular monthly check from the bank to you (although lump sums are also available). Interest and principle pile up, and when you sell the house (or you die), the total balance is due. In the case of death the house is usually sold although it does not have to be.

Front-end fees can be high (up to $20,000) so you do not want to use this type of mortgage unless you expect to collect for many years. (Fees are usually added to the original balance and are not paid until you sell or die.)

The feds have just raised the loan limits, which vary from area to area (check and search for “Mortgage limits” for your area). Generally, in high priced areas loan limits are now as high as $362,790. In rural and non- metropolitan areas, you can borrow up to $220,160.

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