I was going to put some links up for the recent articles and Television pieces on Reverse Mortgages, but there were too many!
Most of them were pretty good, but there are still so many uneducated people out there that still call Reverse Mortgages "loans of last resort" and who think that anyone taking a Reverse Mortgage is deperate. This is clearly not the case.
Many Reverse Mortgage borrowers have many other options and choose a Reverse Mortgage because of the many benefits.
I am trying to determine when one of the Jumbo products that I mentioned last week (Bank of America's Platinum and First Reverse's Jumbo) make sense.
It looks like the proprty value has to be close to or over two million dollars to see any real benefit over the ususal FHA insured Home Equity Conversion Mortgage (HECM)
Both Lenders told me that their products don't work for a co-op and are basically for very high priced homes. LTV's are miniscule at between 16-26, depending on age. So take the middle of that (21) for a 75 year old borrower who could get about $330,000 with an adjustable rate HECM and as much as $420,000 with a fixed-rate HECM and it does not make sense to take a Jumbo loan unless the property is worth over $2,000,000.
I was hoping that these products would fill a need for properties that don't meet HUD guidelines (e.g. certain condos, etc.) but so far, I can't find any circumstance that would warrant these product unless the property value is extremely high.
Just to reiterate, there are some Jumbo Reverse Mortgage products available. The products don't make sense unless the property is HUD inelligible or if it is worth close to Two Million dollars or more.
Bank of America offers the product in AZ, CA, DC, DE, FL, GA, NC, SC, TX & VA.
First Reverse offers the product in AZ, CA, CO, CT, DC, DE, FL, GA, HI, IL, MI, MA, MD, NY, NC, NH, NJ, NM, MD, NV, OH, OR, PA, RI, SC, TX, VT, WA, VA, WI.
After John Dugan's speech about the dangers of propietary (Non-FHA) Reverse Mortgages, I decided to look deeper in to what Proprietary (also knows as Jumbo) Reverse Mortgages are available out there. I thought they were gone, but new products are sprouting ("Green Shoots.")
Before I say what's out there, first a caveat: These products are at VERY LOW LTV's (15-30) What that means is that they ONLY make sense at very high home values (Well over $1 million, maybe even $2 million.) I am not sure what other advantages they provide, but I am still learning as much about them as I can.
Bank of America offers a Jumbo product called "Platinum" but only in the following ten states AZ, CA, DC, DE, FL, GA, NC, SC, TX, & VA.
First Reverse offers a Jumbo Product. I know they are also geographically limited, but I am still working on finding out which states they allow.
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