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Home prices' rise will make a reverse mortgage more attractive 2010-03-05 The process by which reverse mortgage loan limits are set is complicated - but a big factor in the limit calculation is the market value of a home. And recent news that the housing market is firming could mean good things for seniors considering a reverse mortgage: As prices stabilize, reverse mortgage lenders will be more willing to extend loans to eligible borrowers. The widely followed Case-Shiller Home Price Index, released last week, had largely positive news. The 20 major markets that the index tracks saw prices fall 3.1 percent over the course of 2009, but prices actually rose in December. And for the last three months of 2009, economist John Silvia said to MarketWatch, prices increased 3.2 percent. The Federal Housing Finance Agency reported recently that price declines are largely slowing: The rate of year-on-year decline peaked in the fourth quarter of 2008 and has been improving ever since. While the residential real estate market's gradual return to health is ongoing, experts caution that prices may not begin appreciating again until later this year, or even 2011. But the price-improvement trend is welcome, especially for seniors considering a reverse mortgage.  |
