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. 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.

The HomeSafe® for Purchase is an ideal reverse mortgage product for senior borrowers who are looking to relocate. It allows borrowers to purchase a higher value home all with no monthly mortgage payments.  The HomeSafe® JUMBO Reverse Mortgage has a maximum loan amount of $4,000,000 and covers homes valued up to $10,000,000 for purchases or refinances.  These are incredible parameters for high-value homes.

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 $822.375, so the maximum amount of loan proceeds you may be eligible to receive from a HECM is capped. If your home exceeds the $822,375 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 spot condo process can receive condo approved as a single unit rather than demanding the entire condominium project be approved. 

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 together in one place before you meet with a loan originator. You will need to locate and document financial records.

1. Proof of income. Collect pay stubs, W2 forms and if you’re retired, any other documentation of income in retirement. This could include documentation for Social Security (if you’re collecting it), pension details, or 1099 forms for any contract work.
2. Asset information. You will be required to provide all information from checking and savings accounts, independent retirement accounts (IRAs) or any other investment accounts you may have.
3. List of all of your debts. Your debt/expenses will be shown on your credit report. This includes mortgage information, auto loans, credit card debt, medical debt IF it carried over to your credit report and shows up as a collection, and anything else with fixed terms and payments.

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.