What Is a Jumbo Reverse Mortgage?
A jumbo reverse mortgage is a supersized reverse mortgage that lets older owners of high-value homes borrow up to $4 million of the equity in their property. These loans, also referred to as “private” or “proprietary” reverse mortgage loans, aren’t bound by the same regulations as government-backed home equity conversion mortgages (HECMs), resulting in higher borrowing limits (hence the name jumbo), but also potentially fewer protections.
Key Takeaways
- Jumbo reverse mortgages cater to older people who own high-priced property, are short of cash, and require access to more of their home equity than what government-insured reverse mortgages permit.
- Eligibility requirements vary, although common conditions include the borrower owning over 50% of their home equity, living in the home as a primary residence, and being at least 55 years old.
- The amount you can borrow generally depends on the appraised value of your home, the amount of equity you own in the property, and your age.
- Generally, the recipient of a reverse mortgage isn’t required to return the amount borrowed plus interest for as long as they live in the home.
- Less regulation means jumbo reverse mortgage terms can differ considerably from one lender to the next.
How a Jumbo Reverse Mortgage Works
Jumbo reverse mortgages are specifically aimed at older people in need of cash whose money is tied up in a high-priced property and who require access to more of…
