Helpful Information ~ Reverse Mortgage Long Island.com

The proprietary JUMBO Reverse Mortgage program called HOME SAFE has a minimum home value starting at $500,000.  The maximum loan amount is $4,000,000 and covers homes valued up to $10,000,000.  This is an incredible program for higher value homes as it enables borrowers to tap into more of their home equity.  

For many retirees, home equity is one of their greatest assets. Homeowners – age 62 and older – with higher-end properties have turned to proprietary “jumbo” reverse mortgages to unlock this valuable source of housing wealth and for a variety of reasons. 

The majority of reverse mortgages available on the market today are Home Equity Conversion Mortgages (HECM), which are insured by the Federal Housing Administration. While many American retirees have successfully utilized these products, conventional HECMs are not always practical for high-end homes.

Here are three reasons to CONSIDER a jumbo reverse mortgage.

1. Your home value is greater than $822,375.
FHA insures HECM reverse mortgages on properties valued up to $822.375, so the maximum amount of loan proceeds you may be eligible to receive from a HECM is capped. If your home exceeds the $822,375 lending limit, you may be better served by a “jumbo” reverse mortgage loan.

2. You can access more funds.
Proprietary jumbo reverse mortgages, which are not FHA insured, are privately insured by the companies that offer them. These products are often called “jumbo” loans because they allow borrowers to access significantly higher loan amounts compared to traditional HECM reverse mortgages. The best part? There is NO up-front or ongoing mortgage insurance premium!

3. You may tap into your equity from a higher-end condo.
Retirees living in condominiums may also take advantage of reverse mortgages, however, not all condos are FHA-approved to be able to utilize the HECM program.  A unique feature of jumbo reverse mortgages is that condos appraised for $500,000 or higher do not require FHA approval so they could be potentially eligible for a Home Safe jumbo loan. There is still an approval process for condos.  Your condo will be required to complete paperwork to obtain condo approval.  

How to Qualify for a HOME SAFE Jumbo Reverse Mortgage:

* The homeowner must live in the property as their principal residence at least 6 months per year and continue to maintain their property charges including property taxes, homeowner's insurance, HOA fees, and maintain their home. If the homeowner does not meet these loan obligations, then the loan will need to be repaid.  

* Much like the HECM program, the jumbo reverse mortgage has several safeguards in place to protect borrowers. One safeguard is reverse mortgage counseling which is required so that borrowers understand the program as well as their obligations on the loan. 

* Borrowers are required to undergo a financial assessment to ensure their ability to comply with the loan terms and also have adequate funds left over each month after expenses. 

HomeSafe® for Purchase – Right-Size Your Home for Retirement

The HomeSafe® for Purchase is ideal for borrowers who are looking to relocate or right-size to a new home. It allows borrowers to increase their buying power when purchasing a home while eliminating monthly mortgage payments.   

HomeSafe® for Purchase - A Great Solution

A HomeSafe for Purchase may be used to purchase a primary residence without having to waste the cash flow associated with traditional financing as a portion is provided as proceeds through the reverse mortgage jumbo. This allows home buyers age 62+ to purchase a home and obtain a reverse mortgage in a single transaction. The HomeSafe for Purchase can eliminate costs, hassle, and time and makes it easier for retired homeowners to relocate. It also increases the buyer’s purchasing power by allowing the lender to finance a portion of the sales price! HomeSafe for Purchase helps homeowners with these goals:

1. Many want to RELOCATE to be closer to family members
2. Many need to DOWNSIZE to homes to match their needs
3. Many want to UPSIZE to their dream home for retirement

The HomeSafe is a non-recourse loan and the borrower or their heirs have no personal liability for repayment of the loan and can never owe more than the loan amount or appraised value, whichever is lower. There are no prepayment penalties, however, on the fixed rate HomeSafe, a borrower cannot redraw prepaid funds.With any financial decision, it is important to carefully consider your options. The right financial advisor can guide you to a great decision that works for you and enhances your financial goals.  Advisors Mortgage is here to assist in answering any and all of your reverse mortgage questions.