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Jumbo Reverse Mortgage Loans: Get the most out of your reverse mortgage with a jumbo loan

May 25

Whatever stage of your life you're at, you've got many to-do lists of things you'd like to complete before you retire or settle into your old age. But, how do you decide to pay for these items?

FHA Home Equity Conversion Mortgages, commonly referred to as HECMs are a well-known way to gain access to the equity built over time. The maximum amount of these loans is allowed by the Federal Housing Administration. It's possible that the loan proceeds could be increased, however. Is it possible to receive a loan when your home has a higher value than average?

"How much can you borrow with Jumbo reverse mortgages?"

For homes that are valued at over $400,000, a Jumbo mortgage (also known as an exclusive or private reverse mortgage) is a way to tap into equity greater than what is permitted under the FHA's HECM lending rules. You can keep all title and ownership rights to your home by taking advantage of the help of a jumbo reverse mortgage, just like with the HECM. You can pay your mortgage every month or not. Additionally, you are free to decide what you will do with the proceeds of your loan. Local credit unions and banks provide Jumbo reverse mortgages instead of being offered by a nationwide network of lenders. Jumbo reverse mortgage limits may be more significant to access greater equity.

A jumbo reverse mortgage can be an option to consider if you have a significant equity value within your house. A jumbo reverse loan can be an excellent option for four main reasons.

1. More Money To Spend

The main benefit to a jumbo reverse mortgage is having more funds to spend. Contrary to traditional FHA HECM reverse mortgages, jumbo reverse mortgages allow you to access significantly more potential proceeds (currently $822,375 in 2021). For instance, the Longbridge Platinum mortgage gives you access to up to $4 million in cash.

In other words, an expensive house generally means a larger pot of money that is in the bank. Jumbo reverse mortgage loan restrictions are more extensive than FHA lending limitations, which means you have more equity in your home. Furthermore, jumbo reverse mortgages might allow you to quickly access the total amount of the loan proceeds.


2. Refinance larger balances

Reverse mortgages give you the chance to borrow money to pay off higher mortgage balances. What is the most common reason American households have debt? Mortgages are the obvious answer. The balance of mortgages was $10.04 trillion in the fourth quarter of 2020.

An FHA HECM may be used to refinance smaller mortgage amounts. However, there are jumbo reverse loans available to refinance much larger amounts. This is a great option for those living in an area where very high living costs.

3. Lower Closing Fees

It is essential to be aware of the fees and costs of a reverse mortgage when you're considering it. There aren't any fees for mortgage insurance. If you're looking to refresh your knowledge, visit our blog. In addition to the reverse mortgage closing fees and closing costs, borrowers are also responsible for the mortgage insurance premium, including the initial and annual payments. To ensure borrowers' safety and their descendants and their heirs Department of Housing and Urban Development stipulates that all loans made to HECMs be protected with mortgage insurance.

Jumbo reverse mortgage lenders California aren't insured by FHA, so there aren't any upfront or annual insurance costs for those using these lenders. Jumbo reverse mortgages are often cheaper than standard FHA HECMs. This can make them a more appealing and cost-effective option for those who don't have the budget to spend much but still want the benefits of reverse mortgages.


4. Strong Protections for Borrowers

Alongside the above, because the Federal Housing Administration does not insure jumbo reverse mortgages, there are no mortgage insurance charges. These loans offer solid security to the borrower, even though they do not need to be insured. Many jumbo reverse loans include the option of non-recourse insurance. This isn't uncommon. Non-recourse loans safeguard you and your heirs from any time owing to the lender more than what the property's value at the date of sale.

Even though jumbo loans could provide security to the borrower, they're not always assured. Make sure you question your lender regarding the specific security for the borrower if you're thinking of getting a jumbo reverse mortgage.

C2 Reverse Mortgage Carlsbad

2001 Peridot Court Carlsbad, CA 92009

(619) 391-3343