For seniors who live in California and would like a reverse loan to gain access to their equity, they often find that the FHA Home Equity Conversion Mortgage does not allow them enough of their equity to be available to them, and they end up leaving equity “on the table”.
Home values in California tend to be much higher than other parts of the country and since the HUD Lending Limit for reverse loans is capped at $765,600 that means if a borrower’s home value is considerably higher than that, their loan will be capped at the lower value and they would receive less money from the loan.
When that happens, the loan amount will be determined by the above Lending Limit. But what if your home’s value is much higher than that? If it is, then the next possibility is to apply for a Jumbo Proprietary reverse loan that I have discussed in previous posts.
Not only are they more affordable in fees, but they will allow more of the equity to be available to the borrower. It could be a Fixed-rate, a Line-of-Credit or even a 2nd. Trust Deed if the borrower is comfortable keeping an original loan in place.
Some of them have fees and other options do not, depending upon the loan and interest rate that is selected at the time of the loan application.
When considering a reverse loan, it is very important to know what your options are and what would be the best one for you to secure more funds from your home to protect your retirement funds, plan for caregiving expenses or take a dream vacation.
Please contact me if you would like a personalized proposal and more in-depth information about how a reverse loan might be just perfect for you.