What are jumbo reverse mortgages and how do they work?
My mother lives in our family home in the San Francisco. In the current market it's probably worth around $800K although it has been worth more in the recent past. My mother is on a fixed income and one of her friends who lives outside the city took out a reverse mortgage on her smaller and less expensive home awhile back. This friend of my moms now has a little more money and my mom seems to think that she should do the same. When this first came up I talked with a financial planner and we all agreed that a reverse mortgage was a bad idea, but now she's been telling me about jumbo reverse mortgages and I'm wondering how do jumbo reverse mortgage work and what makes them different? Is it really something different and should I talk to the financial planner again?
When this first came up I talked with a financial planner and we all agreed that a reverse mortgage was a bad idea
how do jumbo reverse mortgage work and what makes them different?
They're very similar to FHA-insured Reverse Mortgage programs, but they're not insured.
At 800k, the best Reverse Mortgage will be the FHA-insured program. It'll provide more cash then a Jumbo, the interest rate is lower, it's insured. The secondary market is strong for the fixed interest rate program and many Lenders are offering it and paying most of the homeowners fees. For example, the only fee my clients are paying is the FHA insurance premium.
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