The Jumbo Reverse Mortgage - Answers To Your Questions

The jumbo reverse mortgage is the key that unlocks the door for many seniors who couldn't meet the requirements of an FHA reverse mortgage.

One of the disadvantages of a reverse mortgage is the fact that there are limits to the amount of money reverse mortgage lenders can lend you.

As an example, the most popular of all reverse mortgages is the federally-insured HECM (Home Equity Conversion Mortgage). The amount you qualify for is not only based on your age (minimum 62 years old), but also the value of your house can not exceed $362,790 (at the time of this writing) according to the FHA guidelines.

In addition to this cap, your home's value must also fall within the FHA cap for the particular county in which you live.

Needless to say, these lending restrictions left many homeowners in the Northeast, the West and other affluent areas where home values often exceed this limit, without the access to the federally-insured reverse mortgage.

Although Congress is expected to pass legislation (The Expanding American Homeownership Act of 2007) that will soon raise the FHA-backed loan limit, for now the only other type of reverse mortgage available to you if you fall outside the FHA guidelines is the jumbo reverse mortgage.

Reverse mortgage lenders offering this proprietary product don't place any maximum home value or loan limit for the most part. But, just like its HECM counterpart, it is designed for borrowers age 62 and older who want to annuitize the equity in their home to tax-free cash.

Also, similar to the HECM loan, no repayment is required until you permanently move out of the house.

Nonetheless, you'll tend to hear the same complaints about the jumbo mortgage as you hear about its FHA-backed counterpart, namely, the cost associated with such loans.

It's my opinion as more and more lenders enter the market, you'll see the costs of obtainig this loan decrease. In fact, at the time of this writing, some lenders have already made their proprietary jumbo product very competitive with the HECM loans.

The challenge you'll most likely encounter with obtaining one of these proprietary loans, however, is that they aren't yet offered in all states.

If you're living in a high cost area and you think your home's value exceeds the FHA lending limit, yet have an interest in a reverse mortgage, feel free to contact me and my team will be happy to assist you.

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