A new option for owners of high-value homes!
Today the two most popular types of reverse mortgages on the market are the Home Equity Conversion Mortgages (Insured by the FHA), and Jumbo or portfolio reverse mortgages. While FHA Reverse Mortgages have been around for 30 years, portfolio reverse mortgages are a newer option for owners of a higher-value property, gaining prominence over the last decade with flexible program choices.
The “portfolio reverse” is good news for today’s homeowners that have seen significant growth in value in recent years; homeowners of properties with values around $1,000,000 or higher often find this is the best way to incorporate their home equity into their retirement plan. Many Financial Planners recommend the portfolio reverse as a tool that allows their senior clients to tap into considerably more of their home’s value. A portfolio reverse mortgage is designed for homeowners of higher-valued properties that exceed the maximum value that FHA will consider when calculating a loan amount ($1,089,300), helping them access a larger portion of their home’s value. Those over the age of 55-60 with significant equity in a more expensive home are ideal candidates for a portfolio reverse mortgage.
What benefits make a portfolio reverse different?
While portfolio reverse mortgages have many similarities to the FHA reverse, they are unique for a number of reasons. One of the most notable benefits is that many portfolio reverse mortgages offer loan amounts as high as $4 million. In addition, property values are considered up to $10 million when calculating loan amounts. Another advantage of the jumbo reverse is that these private mortgages do not charge the significant FHA insurance premiums that are required on FHA’s reverse, the Home Equity Conversion Mortgage. Traditionally one of the FHA reverse mortgage’s most significant closing costs and ongoing monthly charges.
A portfolio reverse mortgage is a private or proprietary loan which means the loans terms, conditions and guarantees are established by the lender versus the typical FHA insured reverse mortgage which is administered by HUD. In addition to not incurring the cost of mortgage insurance, today’s jumbo reverse mortgages are available with very low closing costs, even significantly lower than closing costs for the refinance of a traditional home loan. Some jumbo reverse programs have closing costs as low as $125.
Here are some of the features of today’s jumbo reverse mortgages (features and benefits vary by the issuing bank and jumbo loan that is chosen).
- Loan amounts up to $4,000,000
- Property Values up to $10,000,000
- No first-year limits on how much cash you can draw
- Flexible options for accessing your home equity:
* Lump Sum of Cash to You at Closing
* Monthly Payments to You for 12 to 60 months
* Portfolio Reverse as a 2nd mortgage behind your current low rate 1st mortgage
* Line of Credit
* Combination of some of the Options above
Here are just a few of the unique ways other homeowners have used their portfolio reverse mortgage:
-"Our Portfolio Reverse improved our cash flow by eliminating a required mortgage payment and improved our feeling of security with a sizable standby line of credit"
-"My grandchildren will be graduating from college with no student loans thanks to our Portfolio Reverse Mortgage"
-"With our Portfolio Reverse, we put a new roof on our home and updated the kitchen and bathrooms making our home more secure, comfortable...and valuable...while eliminating our required mortgage payment and all without taking on any new monthly payment”.
Contact me today to learn more or for a no-obligation evaluation.
Kal Antoun, Mortgage Advisor