Jumbo Reverse Mortgages

A jumbo reverse mortgage is a unique type of home equity loan available to seniors age 55 or older who would like to use their home equity to acquire cash. Reverse mortgages allow seniors to borrow the cash they need without having to make any monthly mortgage payments. Traditionally individuals need to be 62 or older to get a reverse mortgage but, with a much higher loan limit, a jumbo reverse mortgage can help those who have retired early.  Cash can be used for various needs including home improvements, urgent medical expenses, in-home care, and even normal day-to-day expenses, making reverse mortgages a valuable option for many seniors. Covenant Reverse Mortgage, LLC offers reverse mortgages to seniors throughout Posts Falls, Boise, Caldwell, Coeur d’Alene, and the surrounding Idaho communities.

The most common type of reverse mortgage is the FHA’s Home Equity Conversion Mortgage (HECM). Like all government-backed loans, these reverse mortgages have standard regulations, requirements, and loan limits. Currently, the FHA’s lending limit for Home Equity Conversion Mortgages (HECM) is $970,800. 

There are certain cases where seniors own high-value homes and these limits and regulations simply do not fit their specific needs. Jumbo reverse mortgages, often called private or proprietary reverse mortgages, can be the solution. Much like a traditional reverse mortgage, jumbo reverse mortgages allow homeowners to tap into their home equity in order to receive a lump sum of cash, monthly payments, or a line of credit. The loan does not need to be repaid as long as the homeowner occupies the home and continues to pay their bills. While the basic principle is the same, similarities often end there.


Jumbo Reverse Mortgage Differences 

Loan limits are much higher – The main reason to seek out a jumbo reverse mortgage is because you can borrow a far greater amount of money. Depending on the lender, jumbo reverse mortgages are available for up to $4 million. 

Lenders set their own requirements – Because every HECM loan is backed by the government, each loan is subject to the exact same requirements and regulations. Jumbo reverse mortgages on the other hand are backed by the lenders that offer them. This allows lenders to approve loans as they see fit. Although they have freedom in this area, common requirements often include: 

  • At least 55 years of age 
  • The borrower’s home is their primary residence 
  • The borrower owns more than 50% of their home equity 

Payment options can be less flexible – HECM loans allow the borrower to receive monthly income for life. Jumbo reverse mortgages often stipulate that the borrower must take all the money within a set number of years. 

Things to Be Aware of With Jumbo Reverse Mortgages 

Since jumbo reverse mortgages are not government-backed loans, there are a few things to be aware of. Jumbo reverse mortgages tend to have higher-interest rates generally due to the large loan amounts. The borrower is at a greater risk should something happen. There are also less protections for the borrower. Lenders will often offer similar guarantees, but it is always important to be thorough and ask questions when looking into jumbo reverse mortgages.  

Jumbo reverse mortgages may be the right option if you have a higher-priced home that exceeds HECM loan limits. It is important to consult a qualified lender on your jumbo reverse mortgage options. At Covenant Reverse Mortgage, LLC, we understand there can be a bit of hesitation when it comes to jumbo reverse mortgages. We are here to answer all your questions and educate you on whichever reverse mortgage product is right for you. Whether you are in Posts Falls, Boise, Caldwell, or Coeur d’Alene, we can offer the support you need when seeking a jumbo or traditional reverse mortgage.