You may have heard the term jumbo reverse mortgage while researching reverse mortgage loans but you really didn’t know what that meant. Basically, a jumbo reverse mortgage is one that is more money than the FHA is willing to insure.
There are maximum amounts that are set by the FHA according to the different regions for reverse mortgages. The amounts are based off the medium home values in the area. This can lead to problems for homeowners who may have a home that is worth above the medium price value in the area and wants to take out a reverse mortgage for the full price of their home.
There are not many homeowners who are affected by this, but there are still a handful of people who wonder how they can get a jumbo reverse mortgage. With the recent mortgage crisis and the credit crunch a lot of lenders and financial institutions have stopped offering jumbo reverse mortgages. They feel that the risk is not worth it since the extra money is not insured by the FHA. The recent decrease in housing prices also has not helped the case for these types of loans.
There are some private firms who are still offering people a jumbo reverse mortgage, but they are definitely not easy to get approved for. You must be able to provide proof that your home is worth that much money as well as you give the lender reason for borrowing that much money against your home. If you are really in need of more than the maximum limit that the FHA has put on reverse mortgage loans, you may want to contact these private firms for a free quote to see if they are able to help you.
There is some good news though, recently Congress passed legislation to increase the limit amount on reverse mortgage loans. As of right now, the limit is now $625,000 compared to the previous limit of $417,000. There are not many senior homeowners who are taking out reverse mortgage loans for more than $625,000. If you are wondering how much money you can be approved for, you need to contact a HUD representative who will give you the exact maximum amount that you can borrow.
A jumbo reverse mortgage is definitely not for every senior homeowner. Most homeowners will find that their mortgage amount is well under the maximum limit set by the FHA. But if you do happen to need to find a jumbo reverse mortgage, look for a private firm that has a good reputation and can offer you the money you need. Be sure that you do your research so that you don’t fall for one of the many reverse mortgage scams that are out there nowadays.