Jumbo Reverse Mortgage

Availability of a Jumbo Reverse Mortgage from Louisiana Lenders

Man Relaxes because of his Jumbo Reverse Mortgage

One of the things that has lessened in availability during the recession is a  jumbo reverse mortgage. Louisiana lenders are less likely to offer jumbo reverse mortgages during a period when home values are declining—or at least not increasing in value as they once did.

Finding the Best Jumbo Reverse Mortgage from Louisiana Lenders

Everyone is familiar with the HECM (Home Equity Conversion Mortgage) reverse mortgage that is provided through HUD and insured by the FHA. However, there are other types of reverse mortgages that Louisiana lenders may offer their senior homeowners. One of the most popular reverse mortgages that Louisiana lenders offer is the jumbo reverse mortgage. While this reverse mortgage is less popular than HECM, especially under current economic conditions, it is important for anyone interested in obtaining a reverse mortgage from any of the Louisiana lenders to be aware of its existence and how it differs from the HECM reverse mortgage.

Defining a Jumbo Reverse Mortgage from Louisiana Lenders

The jumbo reverse mortgage is also called a Proprietary Reverse Mortgage. Unlike the HECM reverse mortgage, jumbo reverse mortgages from Louisiana lenders are back by private companies rather than being insured by the federal government. Jumbo reverse mortgages were designed for those homeowners whose homes were valued higher than the $400,000 to $500,000 limit that was previously offered through the federal government’s HECM reverse mortgage. Of course, the amount of money to which a homeowner was entitled would depend on the age of the borrower and location of the property. While it was possible to obtain jumbo reverse mortgages from Louisiana lenders on average priced properties, a homeowner needed to compare the benefits of the Jumbo reverse mortgage to the HECM and Fannie Mae products. The jumbo reverse mortgages that Louisiana lenders offered was beneficial for those homeowners who could not obtain the full value of their equity from a HECM reverse mortgage.

Disadvantages of a Jumbo Reverse Mortgage from Louisiana Lenders

You can look at the advantages and disadvantages in the same way: obtaining jumbo reverse mortgages through Louisiana lenders means you borrow more money from the equity in your home. This means if you take the money in cash you will pay substantially more in interest. On the other hand if you choose to obtain your funds in a line of credit that you draw on as you need or want it, you will only pay interest on the amount of money you actually use.

The jumbo reverse mortgage through Louisiana lenders works the same way as any other reverse mortgage meaning that you don’t have to make any interest payments nor will the balance of your loan ever exceed the value of the home. In addition, as long as you continue to live in the home you will retain your original ownership. For those who have average-priced homes you want to remember the HECM reverse mortgage usually has a lower interest rate than a jumbo mortgage regardless of the Louisiana lender from which you obtain the jumbo reverse mortgage.