YOUR HOME, YOUR GREATEST ASSET

For many retirees, home equity is one of their greatest assets. Homeowners age 60 or older with higher-end properties have turned to proprietary “jumbo” reverse mortgages to unlock their housing wealth and for a variety of reasons. The majority of reverse mortgages available today are Home Equity Conversion Mortgages (HECM) which are insured by the Federal Housing Administration. The maximum lending limit for the FHA HECM is $1,089,300. While many retirees have utilized these products, conventional HECMs are not appropriate for particularly high-end homes simply because they do not yield enough cash from the existing equity.

Here are three reasons to CONSIDER a jumbo reverse mortgage.

1. Your can access more of your equity.
FHA insures HECM reverse mortgages on properties valued up to  $1,089,300  so the maximum amount of loan proceeds you may be eligible to receive from a HECM is capped. If your home exceeds the $1,089,300  lending limit, you may be better served by a “jumbo” reverse mortgage loan with lending limits up to $4,000,000. These "jumbo" loans have the same non-recourse protection as the FHA HECM.

2. No FHA mortgage insurance.
What's the best part about jumbo reverse mortgages? NO up-front mortgage insurance premium!  Proprietary jumbo reverse mortgages, which are not FHA insured, are privately insured by the companies that offer them. These products are often called “jumbo” loans because they allow borrowers to access significantly higher loan amounts compared to traditional HECM reverse mortgages. 

3. Condominium approval process easier. 

A unique distinction of HOME SAFE jumbo reverse mortgages is that condos do not require FHA approval which allows them to be potentially eligible for the HOME SAFE jumbo loan. Also, for both FHA HECM and Home Safe, the single unit condo process can receive condo approved as a single unit rather than demanding the entire condominium project be approved. 

Note:  If there is an underage spouse, a non-borrower, and you want to do a proprietary jumbo reverse mortgage, please note that non-borrowing spouses are not afforded the protection with the as under the FHA HECM program.  

Preparing for Your Reverse Mortgage Financial Assessment

Have you decided that you are ready to apply for a reverse mortgage? Before you complete your application, you will first you will need to take a few preliminary steps beginning with a mandatory financial assessment to make sure you are financially able to meet your loan obligations.  

To get ready for the financial assessment, you should first speak to a reverse mortgage lender to learn how the assessment will be conducted.  Even though a loan officer will conduct an assessment and ask you questions about your tax history, credit and debt payment history, and run your credit, it is the job of the lender to review your application file once submitted and make the final decision as to your financial fitness and approve, suspend, or deny your loan.

Gathering the paperwork

To move the process along, it’s helpful to gather all of the proper documents:

1. Proof of income. Pay stubs, W2 forms and if you’re retired, any other documentation of income in retirement such a Social Security and pensions.  1099 forms for any contract work.
2. Asset information. Checking and savings accounts, independent retirement accounts, 401k's or any other investment accounts you may have if you are using these to qualify.
3. Homeowner's declaration page, HOA/homeowner's association  info, and surveys for those who reside in Florida.

All reverse mortgage borrowers are required to pay property taxes, insurance on the home, and various other expenses for the upkeep of their home. The assessment determines a borrowers willingness and capacity to fulfill their obligations on the loan.