Today, the traditional “three-legged stool” of retirement planning—pensions, personal savings, and Social Security—is often insufficient. Fortunately, there is another largely untapped source of wealth right under your roof.
With home values remaining high, older homeowners are increasingly tapping home equity to improve their cash flow and enhance their retirement lifestyle. However, many remain unaware of the various financial tools available to leverage their home equity effectively.
If you’re in or approaching retirement and looking to boost your cash flow, it’s essential to explore the home equity solutions and programs at your disposal.
While traditional home equity lines of credit (HELOCs) have long been among the most popular financial tools, reverse mortgages are an increasingly popular alternative. The most common type is a Home Equity Conversion Mortgage (HECM), which is backed by the Federal Housing Administration (FHA) and offer numerous strategic advantages and consumer features.
In addition to HECMs, private, non- FHA reverse mortgage programs—like Platinum by Longbridge—offer you more flexibility and lower costs, while still giving you many of the same characteristics that make HECMs so trusted.
Exploring Jumbo Reverse Mortgages
Jumbo reverse mortgages—also referred to as “proprietary” or “private”—go beyond the limits of a HECM. With higher lending limits (hence the term “jumbo”), a wider range of eligible property types, and expanded minimum age requirements1, private reverse mortgages can be a great solution for unlocking greater financial flexibility in retirement.
Of course, everyone’s situation is unique, so the right solution will depend on your individual goals and needs. To help you better understand how a jumbo reverse mortgage might fit into your plans, we’ve answered some of the most common questions we hear from homeowners like you.
What are the main similarities between a HECM and a jumbo reverse mortgage?
Both HECM and jumbo reverse mortgages share several key features designed to make life easier for homeowners in, or nearing retirement.
One of the most notable similarities—and benefits—is optional monthly mortgage payments so long as you keep up with loan obligations such as paying property taxes, homeowners insurance, and home maintenance. That’s right—both the HECM and jumbo reverse mortgage programs offer you the flexibility to make payments toward the loan balance as often as you wish, or none at all,2 deferring the loan balance until a maturity event.
Another important similarity of both loans is non-recourse protection. This safeguard ensures you cannot owe more on the loan than what the home is worth at the time of its sale, even if it depreciates in value. This protects you, your estate, and your heirs from being held personally responsible for any remaining loan balance.
What are the primary differences between a HECM and a jumbo reverse mortgage?
While the two programs work in similar ways, there are a few key differences that might make a jumbo reverse mortgage a better fit for your needs.
- No Mortgage Insurance Premiums
HECM reverse mortgages are federally insured and require mortgage insurance premiums. These fees can add up, especially upfront. Most reverse mortgages cost about 3-4% of the home value, with 2% going to FHA insurance.
For example, on a $500,000 home, the FHA insurance alone would cost $10,000 upfront—plus an ongoing annual fee of 0.5% of the loan balance.
Jumbo reverse mortgages, like Platinum by Longbridge, eliminate these FHA insurance costs entirely. That means lower closing costs overall—similar to what you’d expect with a traditional “forward” mortgage—while still giving you access to your home equity without the extra 2% FHA fee. - Higher Lending Limits
HECM reverse mortgages are subject to a maximum national lending limit set by the FHA. Jumbo reverse don’t have this limit, which could allow you to access more of your home’s equity—and potentially receive more cash. - More Flexible Property Eligibility
In many cases, jumbo reverse mortgages also offer expanded eligibility based on property requirements. For example, condos can generally qualify for a HECM, but they must be first be FHA-approved, which can be a hurdle for many homeowners. Jumbo reverse mortgages, like Platinum, often have less strict requirements, making it easier for certain properties to qualify. - Lower Minimum Age Requirement
Unlike HECMs which have a minimum requirement of 62, Platinum is available to homeowners as young as 55.1 So, if you’re too young for a HECM, private options like Platinum could give you the opportunity to access your home equity sooner.
Why should someone consider a jumbo reverse mortgage?
A jumbo reverse mortgage can be a great solution in several situations—especially if you own a higher-value home and want to access more of your equity than a HECM allows. It’s also a strong option if your property doesn’t meet the FHA’s requirements for HECM eligibility.
The funds from a jumbo reverse mortgage can be used however you choose—whether that’s paying off an existing mortgage (a requirement of the loan), consolidating debt, or simply having extra cash to support your retirement lifestyle. In many cases, a jumbo reverse mortgage can even save you money compared to a HECM, thanks to lower fees and no FHA mortgage insurance premiums.
At Longbridge, our Platinum suite of proprietary reverse mortgage solutions is designed to meet a wide range of financial needs:
- Platinum Line of Credit: Offers flexibility, competitive interest rates, and relatively low costs— similar to a traditional HELOC—while including the added benefits of a reverse mortgage tailored for retirement.
- Platinum Fixed: Ideal if you’re looking for higher loan-to-value (LTV) ratios, updated refinance seasoning requirements, or a solution when previously “short to close” with other options.
- Platinum Preserve®️: Let’s you set aside a portion of your home equity for your heirs, helping you leave a lasting legacy.
Ultimately, the right loan option will depend on your individual situation and goals. Speaking with an experienced reverse mortgage professional can help you explore your options and find the product that best supports your retirement plans.
How does a reverse mortgage compare to a traditional HELOC?
Traditional Home Equity Lines of Credit (HELOCs), HECMs and jumbo reverse mortgages all help you tap into your home equity—but they work very differently. Reverse mortgages are specifically designed for seniors, while traditional HELOCs are not always the best fit for those in retirement.
Here’s why: many older adults get a HELOC while working. Fast forward 10 years to retirement, and their income may drop to just 75-80% of what it once was. When the repayment period kicks in and monthly payments spike, it can cause serious cash flow challenges—often forcing homeowners to refinance into a reverse mortgage later as a long-term solution.
However, there is another option. If you’re looking for a HELOC that better fits your retirement needs, Longbridge’sHELOC For Seniors® may be the answer. It’s the first and only HELOC designed specifically with homeowners age 62 and older in mind.
Unlike traditional HELOCs, which have a spike in payments down the line—right when older adults in retirement may need relief most—HELOC For Seniors® offers reduced, interest-only payments for the life of the loan.2 Of course, Longbridge’s HELOC For Seniors® offers a number of other advantages compared to a traditional HELOC as well. For example, you can get up to $400,0003 cash at a fixed rate per draw4—meaning you can enjoy peace of mind while avoiding the risk of payment spikes from variable interest rates.
And although HELOC For Seniors® addresses the challenges older homeowners have with traditional HELOC products, it is still important to understand how each home equity product aligns with your overall financial picture. For example, a key differentiator of a reverse mortgage is that, unlike a HELOC, there are no monthly mortgage payments required.2 This presents a major savings opportunity every month—and an opportunity to free up even more cash in your budget.
Why should you (or a loved one) consider Platinum by Longbridge?
In two words: consistency and relationships. At Longbridge, we’ve built a reputation as a stable, reliable lender you can count on—even during times of economic uncertainty. Our Platinum jumbo reverse mortgage program remains one of the most flexible and competitive options available, designed to help you make the most of your home equity.
Finding the Right Solution for You
At Longbridge, we’re committed to responsibly helping homeowners like you reshape their financial future by educating them on the strategic use of home equity—and helping you unlock the power of home®.
Our mission is to transform the senior lending industry through unmatched client service, expertise, and transparency. And our team of seasoned professionals will get to know you, and take the time to understand your situation, so we can offer solutions that are suited to your needs.
Above all, we are committed to building long-term relationships with our customers. Our goal is to be the only mortgage company you’ll ever need, supporting you at every stage of retirement and beyond.
Ready to explore your options and see if a Platinum reverse mortgage is right for you? Contact the Longbridge team today.