Jumbo Reverse Mortgage

A Jumbo Reverse Mortgage has been designed especially for senior with substantial home equity or higher-valued homes.

Jumbo loans are also known as propriety reverse mortgage. Jumbo Reverse Mortgages do not have the same value restriction as FHA reverse mortgages, which allows them to offer a larger amount of money to the borrower when the home's value is much greater than the conforming limit. But, the FHA reverse mortgage (known as the Home Equity Conversion Mortgage or HECM) offers a much greater percentage of the home's first $362,790 in value, often making it the better choice until the home value far exceeds the FHA conforming limit.

FHA maximum limits range from $200,150.00 to $362,790.00 depending on the county your property is in. FHA endorsed 43,131 loans for all of FY2005. Year-to-date totals represent a 83 percent increase over the 30,404 loans endorsed during the same period last year. FHA's program is booming, total loans closed in the last year alone jumped by 49 percent to just under 72,000. However, the FHA program has a major drawback for seniors who live in high-cost markets: FHA's congressionally mandated loan limits, which top out just under $363,000, are too low to handle even median-priced homes.

FHA insurance protects reverse mortgage providers against loss if borrowers' equity withdrawals exceed the value of a home when it is sold.

Loan proceeds can be used for any purpose, and taken out as a lump sum, fixed monthly payments, line of credit, or a combination. Loan amount are usually smaller for couples but higher for single people. A line of credit from a HECM can grow is amount but a Home Keeper’s never does. Loan proceeds can be taken out as a line of credit, lump sum payment, fixed monthly payment, or combination.

Interest isn't a dollar-for-dollar write-off. The savings from the mortgage interest deduction is only equal to your tax bracket. Interest rates charged on Jumbo Reverse Mortgage loans are sometimes higher than those on a HECM loan. However, a Jumbo Reverse Mortgage will only charge you interest on the sum of money you actually use from a line of credit which is available to you.

Financial Freedom pioneered a no-fee jumbo reverse that satisfied some of the higher-end customers while the federally insured Home Equity Conversion Mortgage also made huge strides in reducing fees and improving a once-bulky process. Financial Freedom is a nationwide company and boasts one of the largest volumes of reverse mortgages. FF offers three of the most popular types of reverse mortgages: the federally insured Home Equity Conversion Mortgage (HECM), the Fannie Mae Home Keeper which features a slightly higher lending limit and is suitable for all condo owners, and Financial Freedom’s own proprietary reverse mortgage, Cash Account Advantage.

Generally, when you receive a calculation from a loan officer it will contain at least three programs with the program offering the most money in the first column. Generally, Jumbos begin to offer an advantage when the home is valued above $600,000, but there are exceptions for both higher and lower values. The older the homeowner is, the more likely that a jumbo could offer more money on a home value of less than $600,000.