What is A Jumbo Reverse Mortgage?

A jumbo reverse mortgage is an option designed for homeowners with high-value homes. It fills a void created by the lending limits of the Federal Housing Administration's (FHA) Home Equity Conversion Mortgage (HECM) loan program. Since the HECM program has been designed to suit people with homes valued up to a set amount, it isn't suitable for individuals with higher valued homes. However, with a Jumbo Reverse Mortgage, individuals with homes surpassing that limit can still leverage their home equity for cash.

Jumbo reverse mortgages are a type of Home Equity Conversion Mortgage that enables property owners aged 62 years and older to convert their home's equity into cash without the need to sell the property. In comparison to traditional mortgages, reverse mortgages offer flexibility to homeowners by making them earn an income stream that they can use to finance their needs.


What Are the Benefits of a Jumbo Reverse Mortgage?

There are several benefits of obtaining a jumbo reverse mortgage, including:

  • High loan limits: If you have an expensive home, a jumbo reverse mortgage enables you to access more cash than you would through an HECM. You may receive higher credit limits, giving you access to a more substantial capital amount, depending on your home's value and your credit history.
  • No monthly payments: Jumbo reverse mortgages do not demand monthly mortgage payments, freeing up cash flow for other essential expenses like healthcare and medical bills. Since the mortgage originates from the property, you typically make no payments unless there is a default with the loan terms.
  • Flexibility: Unlike a traditional mortgage, a jumbo reverse mortgage has relaxed guidelines during the application process. Thus, they have more flexibility and lenient requirements, including no income or credit score requirements. This flexibility enables people worried about getting approved for loans to bring out some life-changing money that they can use to finance essential needs.

How Much Can I Borrow with a Jumbo Reverse Mortgage?

The amount you can borrow in a jumbo reverse mortgage differs significantly depending on your home's value, your age, and other determining factors the lender considers. However, there is a maximum limit on the amount you can borrow.

The most critical determinant of how much credit you can get is your home's value which is appraised before the loan is approved. The higher the house's value, the more credit you can access.

Is It Possible to Refinance My Existing HECM Into a Jumbo Reverse Mortgage?

It's possible to refinance your HECM into a Jumbo reverse mortgage but it depends on the individual lender's policies. If your home has appreciated in value over time and your loan size exceeds the HECM maximum loan limit, refinancing may be the best option.

Refinancing your existing HECM to a Jumbo Reverse Mortgage may significantly increase your borrowing power, giving you more access to cash when you need it, especially since the Jumbo loan has no maximum loan limit. Additionally, it's possible to convert your HECM line of credit for a more significant draw from your home equity using a Jumbo Reverse Mortgage.

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