Believe it or not, there is another Reverse loan option that has entered the market for Reverse mortgages and it’s not the FHA HECM loan program.
It’s a Jumbo loan for those situations where the property is considered to be “high value” such as about $2,000,000+.
A few years ago, there was one that was offered briefly but ultimately the lender that provided it, withdrew it from the market in the wake of the recession and there were no other options for larger loans until last week.
This new loan is a Fixed rate without any FHA Mortgage Insurance Premium ( A closing cost savings) and your standard closing costs. No surprises and works just the same at the FHA Reverse loan.
It’s ideal for the homeowner who has a high value home and a small existing mortgage or none at all, because the FHA program caps a property value at $625,500.
The lending limit on the Jumbo product is a whopping $6,000,000.00 and caps a new loan at $3,000,000.00 and not only can it be used for refinancing a property, it also can be used to purchase a new home.
And of course there are no mortgage payments, qualifying ratios to deal with or FICO score.
- The Title of the property stays in the Borrower’s name and or Trust
- When the borrower passes away the property goes to the estate.
- The Lender never takes over the ownership of a property
- The heirs can either refinance the loan into a traditional mortgage and keep it or sell it and receiving any remaining equity.
- In either event, the heirs will receive a mortgage interest tax deduction in the year the mortgage is satisfied.
Using a Reverse loan has grown into one, new method to manage and control one’s investments and savings, by using the money from it for any extraneous and unplanned expenses as many Financial Advisors are discovering and implementing for their clients.