Reverse Mortgage Information & Products
Jumbo Reverse Mortgages and HECM Loans
How Reverse Mortgages Work
A reverse mortgage is a home equity loan or mortgage designed for older homeowners. With a reverse mortgage, the lender pays the homeowner either a lump sum, monthly payments or a line of credit to access money over time. Since it is a loan, it must be paid back, but not until the end, after the owners leave the home permanently or sell the property. There are no monthly payments required from the borrower during the time they remain in their home.
Interest is charged on the reverse mortgage loan balance and added to the balance (compounding) and the debt balance continues to increase. In essence, you are using your equity now, while you enjoy your home and there will be less in the future for you or your heirs, although home value appreciation offsets the rising loan balance.
Find out if you qualify for a Reverse MortgageQualifying for a reverse mortgage is easy provided you and any co-borrower:
- are both at least 62 years old
- are living in the home as primary residence
- have balances on any existing mortgages no higher than funds available through reverse mortgage. Find out if your mortgage is too high for a reverse mortgage
If you apply for a Home Equity Conversion Mortgage (backed by the federal government) you must receive reverse mortgage counseling prior to starting the loan process. See our Reverse Mortgage Counseling page.
Federally Insured Government Reverse Mortgages
Federally backed reverse mortgages are known as Home Equity Conversion Mortgages or HECM. These mortgages have mortgage insurance through the FHA, and guarantees you continue to have access to your funds. The FHA insured HECM also has the benefit of protecting you and your heirs if the loan balance exceeds your home’s value. The home stands for the debt and you would not be required to go out of pocket if there is a deficiency.
The HECM has a maximum claim amount of $625,500 so a higher valued home would cap at that amount.
Private or Jumbo Reverse Mortgages
New Jumbo Reverse Mortgage, HomeSafe is now available for homes and condos in California, Hawaii, Florida & New Jersey and will be rolled out in other states soon.
- This new private, non-FHA #JumboReverseMortgage called “HomeSafe,” is available through us as a reverse mortgage broker and underwritten through Urban Financial.
- Maximum loan amount is $2.25 million
- Fixed interest rate is currently 6.99% (similar to full HECM fixed accural rate)
- There is no mortgage insurance premium and no loan origination fee
- Borrower's must draw all funds at closing, there will be no line of credit or monthly payment option (jumbo line of credit program to be available in October, 2014.)
- Non-FHA approved #condos valued over $500,000 that pass the spot condo requirements will be eligible
- Available for #ReverseMortgage for Home Purchase and seller concessions are allowed.
- New Construction is acceptable as long as the certificate of occupancy is issued prior to closing (HECM requires CO prior to application)
- Reverse Mortgage Counseling is required. Two counseling sessions for California borrowers.
- Financial Assessment must be completed.