THE NEW REVERSE MORTGAGE
Reverse mortgages are now being offered by banks with loan amounts as high as $4 Million. In addition to offering much higher loan amounts than the HECM reverse mortgage there is no mortgage insurance requirement, which results in much lower closing costs....and with no annual mortgage insurance premiums the loan balance will not grow as fast. Additionally, this is a non-recourse loan which means you or your eventual heirs will never owe more than the house is worth.
The loan amount is calculated by using the age of the younger borrower, appraised value of the home, and current interest rates. Additionally, banks have come out with hybrid Jumbo plans that offer a Line of Credit option and other draw options at closing. Like the HECM the Jumbo reverse must first pay off any mortgages/liens on the property and be the only mortgage on the property. One person must be 62 or older and it must be their primary residence. Third party telephone counseling is also required. Mortgage payments are not required with these loans. Borrowers are still responsible for property taxes, homeowner's insurance, HOA dues & assessments.
Jumbo reverse mortgages are available for primary resident condos appraising for $500,000 or more and primary resident single family homes appraising for $800,000 to $10,000,000.
Here are 2 examples of recently closed Jumbo reverse mortgages:
Malibu - Age 77
Appraised value: $6.0M
Total net proceeds: $2,976,000
Current mortgage paid off: $1,980,000
Cash at closing: $996,000
New monthly mortgage payment: $0
Brentwood - Age 73
Appraised value: $3.7M
Total net proceeds: $1,661,000
Current mortgage paid off: $160,000
Cash at closing: $1,501,000
New monthly mortgage payment: $0
The loan amount is calculated by using the age of the younger borrower, appraised value of the home, and current interest rates. Additionally, banks have come out with hybrid Jumbo plans that offer a Line of Credit option and other draw options at closing. Like the HECM the Jumbo reverse must first pay off any mortgages/liens on the property and be the only mortgage on the property. One person must be 62 or older and it must be their primary residence. Third party telephone counseling is also required. Mortgage payments are not required with these loans. Borrowers are still responsible for property taxes, homeowner's insurance, HOA dues & assessments.
Jumbo reverse mortgages are available for primary resident condos appraising for $500,000 or more and primary resident single family homes appraising for $800,000 to $10,000,000.
Here are 2 examples of recently closed Jumbo reverse mortgages:
Malibu - Age 77
Appraised value: $6.0M
Total net proceeds: $2,976,000
Current mortgage paid off: $1,980,000
Cash at closing: $996,000
New monthly mortgage payment: $0
Brentwood - Age 73
Appraised value: $3.7M
Total net proceeds: $1,661,000
Current mortgage paid off: $160,000
Cash at closing: $1,501,000
New monthly mortgage payment: $0