Here’s what you need to know about jumbo reverse mortgages.

Reverse mortgages are quickly becoming a popular strategy to provide older homeowners with a comfortable financial cushion as they age.

By tapping into your home equity, you can access extra cash for medical needs, daily living expenses, or long-term care.

But in some cases, the HECM reverse mortgage limits placed by HUD on principal amounts are holding seniors back from accessing the full potential of equity available from a high-value home.

To meet this need, select loan providers are offering jumbo reverse mortgages.

Also known as proprietary reverse mortgages, these products calculate loan proceeds using the full amount of the home’s value. Loan amounts are available up to as much as $4,000,000 or higher.

If you’ve been wondering whether a jumbo reverse mortgage is right for you, there are many factors to consider. How much can you expect to access from a jumbo reverse mortgage? Is it really worth it?

You may be looking for a jumbo reverse mortgage calculator to figure out the answers to these questions.

Here’s our take.

HECM Vs. Jumbo Reverse Mortgage?

The most obvious difference between a traditional HECM (Home Equity Conversion Mortgage) and a jumbo reverse mortgage is the amount of money you can access.

With a traditional reverse mortgage, the maximum lending limit is just $822,375 (2021), while a jumbo reverse mortgage allows you to borrow up to $4,000,000+.

Another important difference is the amount of your loan that you can use. Unlike a HECM, you can take up to 100% of the proceeds in one lump sum with a jumbo reverse mortgage. You could also opt to receive the loan amount in monthly payments if you prefer.

Jumbo Reverse Mortgage Rates

The rates and cost of a jumbo reverse mortgage is an important factor to consider in your calculations.

In general, rates vary depending on your age and the value of your home.

One advantage to a jumbo reverse mortgage rate is that you can eliminate the initial and monthly cost of paying for FHA mortgage insurance since you are not required to ensure this kind of loan.

This is a significant saving when you consider that the cost to insure a HUD loan is 2% of your home value or lending limit, resulting in closing costs potentially in the thousands.

Is It Worth It?

Jumbo reverse mortgages are private products that emerged to fill a need following stricter HUD regulations after the 2009 market crash.

If you have a high-value home, this type of reverse mortgage can fill a need for you, allowing you to tap into your equity without restrictions.

Before taking on a jumbo reverse mortgage, make sure you can keep up with ongoing home insurance and maintenance costs.

A simple jumbo reverse mortgage calculator can’t take into account all the factors of your unique situation.

To find out for sure whether this product is right for you, contact Angella Conrad and her team today. They will guide you to the product that is right for you.