Reverse Loan Choices

When I first started in the reverse loan industry over 17 years ago, there was only one loan option at the time.  And it was the FHA Home Equity Conversion Mortgage, affectionally known as the HECM.   It is a Line-of-Credit and remains the most popular reverse mortgage that seniors apply for.

Initially, there was one interest rate and no other choices,  but now there are several different rates that a borrower can select, of course depending upon what is the most beneficial to them and their particular goals.  And there are also Fixed-rate mortgages for those who may be sensitive to interest rate fluxations.

And although the FHA loan remains very popular there are additional options for the borrower to choose from, especially if their home exceeds the HUD Lending Limit that as of this writing, is $679,650.00 and they want to access more of their equity than the HECM would provide to them.

So what is the solution to this question when a home’s value is much more than the HUD Lending Limit and especially in those states such as California where the average home value is quite often above 1MM?

A Jumbo reverse loan of course.   And in the last few years what started out as a single offering, has developed into several options allowing more benefits to a senior homeowner.

My next post will share some of the details about them, how they function and whether or not they are always the best choice for a senior who is considering a reverse mortgage.

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