Whether you’re planning for retirement or settling into those long-anticipated “golden years,” you likely have a laundry list of fun activities, hobbies, or maybe even trips you’re anxiously awaiting to check off. But how exactly are you planning on funding them?
While Home Equity Conversion Mortgages (HECMs)—the most common type of reverse mortgage—have become an especially attractive financial tool for homeowners 62 and over to tap into the wealth they’ve built up in their home over the years, the reality is that HECM loans may have limitations for certain borrowers. The biggest difference is that, because they are insured by the Federal Housing Administration (FHA), they are limited to a maximum loan limit set by the federal government.
But what if your home’s value is above the HECM lending limit set by the FHA? That’s where jumbo reverse mortgages—like Platinum by Longbridge—come in!
Jumbo reverse mortgage options have become valuable alternatives for older homeowners whose circumstances and goals go beyond a traditional HECM. With more available cash, different requirements, and greater flexibility, a jumbo reverse mortgage could give you funds you need to live life to the fullest.
Let’s dive in to the details.
Why Consider a Jumbo?
With a jumbo reverse mortgage (also known as a “proprietary” or “private” reverse mortgage) you get features and protections similar to HECM reverse mortgages—but with added benefits and flexibility. This means that, just like a HECM, you maintain full title and ownership to your home, you don’t have to make monthly mortgage payments, and the loan proceeds can be used however you wish. (As with any mortgage, you must meet your loan obligations, like keeping current with property taxes, insurance, and maintenance.)
One key difference? Jumbo reverse mortgages are not insured by the FHA and are instead designed and offered via individual financial institutions (like Longbridge Financial). But the differences don’t stop there.
Here are 4 powerful reasons to consider a jumbo reverse mortgage loan:
- More available cash. Let’s start with the most obvious benefit of a jumbo reverse mortgage: more money. While a standard HECM reverse mortgage only offers amounts up to the FHA lending limit, jumbo reverse mortgages allow you to potentially access substantially more in available proceeds. For instance, Platinum by Longbridge offers loan amounts up to $4 million.1 Simply put, a higher value home often equates to a larger pool of equity to draw from. And with access to a higher loan amount, you have the power to do more: eliminate a large existing mortgage balance, consolidate high-interest debt, cover everyday bills and medical expenses, fund home improvement projects, or simply chase your dreams.
- Lower minimum age requirements. Another limitation of HECM loans is the minimum age requirement of 62. The good news is, if you’re not 62 just yet, a reverse mortgage is still a possibility! Certain jumbo reverse mortgages offer lower minimum age requirements. For example, Platinum is available to eligible homeowners as young as age 55.2 This is another powerful difference that makes jumbo options a more flexible, accessible option for many homeowners.
- No mortgage insurance premiums. If you’re considering adding a reverse mortgage to your overall financial strategy, you’re probably familiar with the costs and fees that come with the loan. One of the major costs HECM borrowers are faced with is the mortgage insurance premium—both the initial payment at closing and the ongoing annual payments. This mortgage insurance is required on all HECM loans, however, since jumbo reverse mortgages are not FHA-insured, jumbo borrowers are not required to pay any mortgage insurance premiums. As such, jumbo reverse mortgage often have lower closing costs than those of a HECM—making them an attractive alternative for some homeowners.
- Robust borrower protections. While these loans are not subject to the insurance fees required by HECM loans, they still offer robust borrower (and spousal) protections. As a matter of fact, many jumbo reverse mortgages offer protections that mimic those offered by FHA, including non-recourse protection. With a non-recourse loan, you and your estate are protected from ever owing the lender more than your home is worth at the time of sale.
With different lenders offering their own versions of jumbo reverse mortgages with unique guidelines, interest rates, features, and protections, finding the jumbo reverse mortgage that works best for you is critical.
The Power of Platinum
We’ve touched on many of the features already, but at Longbridge, we proudly offer Platinum—our flexible proprietary jumbo reverse mortgage product thoughtfully created to fit a variety of financial goals. Whether you’re looking to maximize your cash today, plan for the future, or leave a legacy, there’s a Platinum option designed to help you live the life you imagine.
Want to see what Platinum could do for you? Contact our team today!
1 The state of MA has a maximum loan amount/lending limit of $2,000,000.
2 Available to borrowers as young as 55 in select states only. Higher minimum age requirements may apply.
Longbridge Platinum Reverse Mortgage (“Platinum”) is Longbridge Financial LLC’s proprietary loan program and is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Platinum is available to qualified borrowers who also may be eligible for FHA’s HECM program or are seeking loan proceeds that are higher than FHA’s HECM program limit. Platinum currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state.