If you are a homeowner to a higher-valued estate, you may earn a bigger loan advance through a Jumbo Reverse mortgage ( which is a proprietary reverse mortgage program). The Jumbo program reaps you a diverse range of benefits. It does not require continuous monthly payments, which makes this program even better. It holds reduced interest rates and lower principal limits.
Looking for experts to guide you through it all? Contact our team today!
Homeowners who are of age 62 and over have gained a whole lot from the HUD Home Equity Conversion Mortgage or HECM despite the fact that the reverse mortgage program did go through a rough patch.
In order to sustain the program, the Department of Housing and Urban Development (HUD) had to make various moves that rendered the program a lot more difficult to qualify for and then reduced principal limits as well.
As of October 2, 2017, the changes that took effect had a two-fold effect, first off, principal limits were lowered, and lowering the interest rate floor resulted in borrowers getting even less money out of the program.
The losses that the HECM program experienced can be traced to borrowers who could no longer afford their home even after taking out the reverse mortgage.
Borrowers who defaulted on insurance and taxes didn’t help either and then to compound the problem, plummeting market values.
Borrowers who rely on federally-insured loans placed the Mortgage Insurance Fund at risk and the HUD had to rise to the occasion.
One of the desirable developments that emerged from the changes made by the HUD includes the return of jumbo & Proprietary Reverse Mortgage programs. For a larger portion of borrowers, the jumbo programs just wasn’t it.
More often than not, borrowers whose homes were worth less than $765,600 got more money out of the HUD programs and at lower rates too!
But with the changes that the HUD put in place, it provided a leeway for proprietary loans to make another entry into the market with a product that was well suited to homeowners who have their home’s value pegged above the lending limit of $765,600.
Reducing interest rates for several months has begun to make the jumbo Reverse Mortgage loans appear very attractive.
A drop in the fees and an attractive range of products being offered are tempting to many a homeowner.
It is quite hard to find a reliable jumbo reverse mortgage calculator online. The reason behind this is, there are only very few jumbo reverse mortgage lenders that offer this loan.
The percentage of the appraised value that you receive is almost similar in every case, that is, irrespective of the jumbo lenders. The difference in the percentage that the jumbo reverse mortgage lenders offer is very small. Therefore, there is no good jumbo reverse mortgage calculator online.
As a certified reverse mortgage broker, we work with several jumbo mortgage lenders and can offer you the best deal.
So, check out our estimations and learn about what suits you best.
The jumbo program does not require upfront and continuous monthly payments of mortgage insurance, making the program even more appealing.
The upfront mortgage insurance that usually requires paying with the HECM loan is calculated to be around 2% of home value while the lending limit of $765,600 still persists.
This implies that borrowers using the jumbo program would save $15,312.00 on closing costs as against the HECM.
Jumbo rates that used to be as high as 7.50% have come down as low as 4.99% and do not mandate the payment of extra monthly insurance charges that are typically mandatory for any government HECM plan.
While a monthly mortgage isn’t regarded as interest, it still accrues in a similar manner, so a jumbo loan would save you this cost.
Removing the monthly mortgage insurance of .50% charged by the HUD, and then taking into cognizance the reduced rates, the jumbo reverse mortgage loan becomes thoroughly attractive.
| Fixed Rate | Adjustable Rate | Lending Limit |
|---|---|---|
| 5.95% (6.125% APR) | 5.121% (4.875 Margin) | $3,000,000 |
| 6.075% (6.075% APR) | 5.33% (4.99 Margin) | $3,000,000 |
| 6.50% (6.625% APR) | 5.46% (5.124 Margin) | $3,000,000 |
| 6.99% (6.99% APR) | 5.58% (5.240 Margin) | $3,000,000 |
Jumbo APR Illustration: Assumes $1,000,000 loan amount, includes standard 3rd party closing costs.
Adjustable-Rate Payment Options: Lump Sum or Line of Credit
Index: 3-Mo. Libor
Lifetime Cap: 3% Over Start Rate
The jumbo reverse mortgage guarantees that borrowers would receive a higher amount of money as a portion of their home value, thereby providing an improved loan-to-value ratio.
Unlike previous occasions, your home doesn’t have to be worth up to $1,500,000 before the loan seems fair. More borrowers can use this option now.
| Current Rates | 5.950% (6.125% APR) | 6.750% (6.875% APR) | 6.99% (7.00% APR) | 7.125% (7.250% APR) |
|---|---|---|---|---|
| Borrower Age | Loan-to-value | Loan-to-value | Loan-to-value | Loan-to-value |
| 62 | 29.6% | 31.0% | 39.6% | 41.1% |
| 65 | 32.6% | 34.0% | 42.1% | 43.6% |
| 70 | 35.9% | 37.3% | 46.4% | 47.9% |
| 75 | 39.3% | 40.7% | 50.1% | 51.6% |
| 80 | 44.1% | 45.5% | 54.0% | 55.5% |
| 85 | 48.4% | 49.8% | 57.6% | 59.1% |
| 90 | 50.6% | 52.0% | 60.5% | 62% |
Available Payout: Lump Sum
*To calculate your loan amount divide your home value into the LTV percentage.
E.g., $2,000,000 value, age 70 at 6.99% rate = 46.4% LTV or $928,000 loan amount.
Loan-to-values (LTV) are subject to change without notice & exceptions may be granted.
| Programs | HomeSafe |
|---|---|
| Borrower Age | Loan-to-value |
| 62 | 39.6% |
| 65 | 42.1% |
| 70 | 46.4% |
| 75 | 50.1% |
| 80 | 54.0% |
| 85 | 57.6% |
| 90 | 60.5% |
Available Payout: Line of Credit or Lump Sum
*HomeSafe® jumbo reverse mortgage is offered by Finance of America and American Advisors Group.
*To calculate your loan amount divide your home value into the LTV percentage.
E.g., $2,000,000 value, age 70 at 5.92% rate = 47.4% LTV or $948,000 available line of credit.
Considering the better offer that the jumbo program now provides (higher loan amounts, lower fees, and rates as well as underwriting enhancements), it is a suitable option for seniors whose properties are valued at $765,600 and above.
While the new jumbo products may not be perfect for every single borrower, it does offer more options and increases the choices available.
It allows seniors an opportunity to access a scheme that takes into consideration the full value of their home up to $4 million.
It’s already been established that a jumbo loan refers to a mortgage that goes above and beyond the limit that the FHA set for a particular area. For 2020, the Federal Housing Finance Agency increased the maximum conforming loan limit for a single-family property to $510,400 from $484,350. For high-cost areas, the maximum conforming loan limit is typically around $765,600.
These limits are typically binding on all conforming loans that toe the Fannie Mae or Freddie Mac guidelines. If you’re purchasing a home in 2020 using an FHA loan that has the backing of the Federal Housing Administration, then you would be bound by a different loan limit. In 2020, the FHA loan limit stands at $331,760. However, in about 70 high-cost counties, the $765,600 maximum loan limit still applies.
In essence, this would imply that any mortgage that goes beyond the baseline amounts mentioned is categorized as a jumbo loan in 2020. In addition, an FHA jumbo loan and a conventional jumbo loan differ to an extent.
Although $510,400 remains the standard limit for 2020, we may see variations occurring as a result of factors such as state lending limit, a difference in average home values as well as real estate market activity.
A clear example is the fact that every county in Hawaii and Alaska has a limit of $765,600 which is the maximum that it can be. American territories such as the U.S Virgin Islands and Guam have the same limit applying as well.
The table below comprises an overview of every state, county or territory that has its conforming loan limit above the standard $510,400.
Every other area not included on this list has its conforming loan limit at $510,400.
| State/Territory | Counties | Limit |
|---|---|---|
| Alaska | All counties | $765,600 |
California | Mono County Placer County, El Dorado County, Sacramento County, Yolo County Santa Barbara County Monterey County San Luis Obispo County San Diego County Sonoma County Ventura County Napa County | $529,000 $569,250 $625,500 $672,750 $690,000 $701,500 $704,950 $713,000 $764,750 |
Colorado | Adams County, Broomfield County, Denver County, Arapahoe County, Douglas County, Elbert County, Jefferson County, Park County, Clear Creek County, Gilpin County Lake County, San Miguel County Routt County Boulder County Eagle County Pitkin County,Garfield County | $575,000 $625,500 $638,250 $644,000 $750,950 $765,600 |
| Connecticut | Strafford County, Rockingham County | $690,000 |
| Florida | Monroe County | $552,000 |
| Georgia | Greene County | $515,200 |
| Hawaii | All counties | $765,600 |
Idaho | Blaine County, Lincoln County, Camas County Teton County | $625,500 $765,600 |
Maryland | Queen Anne’s County, Anne Arundel County, Howard County, Carroll County, Baltimore County, Baltimore City, Harford County Frederick County, Montgomery County, Prince George’s County, Charles County | $520,950 $765,600 |
Massachusetts | Essex County, Middlesex County, Suffolk County, Norfolk County, Plymouth County Dukes County | $690,000 $765,600 |
| New Hampshire | Fairfield County | $601,450 |
New Jersey | Ocean County, Monmouth County, Middlesex County, Somerset County, Hunterdon County, Morris County, Sussex County, Passaic County, Bergen County, Essex County, Union County, Hudson County | $765,600 |
New York | Dutchess County, Orange County Putnam County, Westchester County, Rockland County, Bronx County, New York County, Kings County, Queens County, Nassau County, Suffolk County | $726,525 $765,600 |
North Carolina | Camden County, Pasquotank County, Perquimans County | $625,5000 |
| Pennsylvania | Pike County | $765,600 |
Tennessee | Dickson County, Cheatham County, Robertson County, Sumner County, Macon County, Trousdale County, Smith County, Wilson County, Davidson County, Williamson County, Maury County, Rutherford County, Cannon County | $563,500 |
Utah | Tooele County, Salt Lake County Box Elder County, Weber County, Davis County, Morgan County Summit County, Wasatch County | $600,300 $646,300 $762,450 |
Virginia | Caroline County, King and Queen County, King William County, New Kent County, Hanover County, Louisa County, Goochland County, Henrico County, Charles City County, Prince George County, Colonial Heights City, Chesterfield County, Richmond City, Powhatan County, Cumberland County, Amelia County, Dinwiddie County, Sussex County, Petersburg City, Hopewell City Spotsylvania County, Fredericksburg City, Stafford County, Fauquier County, Culpeper County, Madison County, Rappahannock County, Warren County, Prince William County, Manassas Park City, Clarke County, Loudoun County, Alexandria City, Falls Church City, Fairfax City, Fairfax County, Arlington County | $535,900 $765,600 |
| Washington, D.C. | District of Columbia | $765,600 |
Washington State | Snohomish County, King County County, Pierce County | $741,750 |
West Virginia | Jefferson County, King County County, Pierce County | $765,600 |
| Wyoming | Teton County | $765,600 |
| U.S. Virgin Islands | All areas | $765,600 |
| Guam | All areas | $765,600 |
The properties that the jumbo programs are eligible for include single-family residences, two-unit properties provided that one unit is occupied by the borrower as well as condominium properties. And for condominium properties over $400,000, no special reverse mortgage condo approval from HUD is required.
Non-borrowing spouses are eligible, however, they do not get the type of protection that the HECM offers.
Non-borrowing spouses are allowed on with extra requirements like the borrower’s attorney and a court reporter in attendance to ensure that the terms are understood by all the parties involved.
The Best Jumbo Reverse Mortgage
If your home is valued higher than the federal lending limits, a HECM loan may not be right for you. A jumbo reverse mortgage is a name for a variety of proprietary products offered by all the major reverse mortgage lenders. When you work with a reverse mortgage broker like South River Mortgage, we can shop for you to find the best jumbo reverse mortgage for your needs. Here’s what you need to know about a jumbo reverse mortgage.
How a Jumbo Reverse Mortgage Can Help Your Finances
At South River Mortgage, we specialize in all reverse mortgage options. A jumbo reverse mortgage and a proprietary reverse mortgage, however, are different from standard HECM loans. They’re based on the equity of your home and may make sense if your home value is greater than the federal lending limit for HECM loans.
For many seniors, you likely don’t plan on moving from your home again. As a result, you have likely accrued significant equity in your home. A jumbo reverse mortgage and a proprietary reverse mortgage can be used to gain access to those funds and cushion your wallet.
Seniors everywhere have been loving how using a jumbo reverse mortgage can unlock their financial freedom. It’s a loan that you never pay back in your lifetime unless you move or fail to meet your obligations like homeowners insurance and property taxes among others. Instead, your estate pays it back after you pass. It’s paid back through selling the home, primarily.
Seniors typically use a reverse mortgage to pay expenses, get out of debt, invest, and even to go on adventures.
Choose Us To Help With Your Proprietary Reverse Mortgage
We know that mortgages are scary. You can use our jumbo reverse mortgage calculator to help see how much you can receive. Our jumbo reverse mortgage calculator can also be used to determine if you qualify for one of our loans.
Start Your Application Today
The first step you should take is to use the jumbo reverse mortgage calculator to determine your eligibility. Give us a call to start your application or to find out more information about our reverse mortgages.
Would you like to explore a Jumbo Reverse Mortgage for your situation? Call us at (844) 230-6679 if you live in one of the following states. As your local broker, we work with several lenders across different states and cities and provide required consultation service with no pressure or obligation.
For other states, contact a good reverse mortgage consultant who has originated a good number of reverse mortgage loans with a Broker License (NMLS) and preferably holds the designation ‘Certified Reverse Mortgage Professional (CRMP)’.
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