Proprietary Loan - Jumbo Reverse Mortgage Loan

Jumbo reverse mortgages, also known as proprietary reverse mortgages, are a type of reverse mortgage. Financial institutions such as reverse mortgage lenders create and provide these jumbo reverse loans. These equity loans enable high-value home owners to access larger amounts of their home equity than government-insured HECM reverse mortgages.

In response, some reverse mortgage lenders have developed their versions of the government-backed home equity conversion mortgage (HECM) product in response to the substantial increase in home property values in particular regions of the United States. This is their answer to the federally insured HECM reverse mortgage loan, which can only cover a certain amount of a home's value.

These programs have the same safety provisions as the FHA (federal housing administration) HECM program. Like the FHA loan, this loan is still non-recourse. The title stays in the homeowner’s name, the children still inherit, and so on with non recourse loans.

What is significantly different is that we can use full property values of up to $10 million to make a loan of up to $6 million. There are no monthly payment requirements for these jumbo reverse mortgage loans.

In the current housing market, capital gains taxes are onerous. Many clients own homes and condominiums worth $1 million to $10 million and live on a pittance of social security. 

The client’s children are unable to assist them in making ends meet. They are not qualified for a traditional loan or credit line. The jumbo loan income requirements take into account our clients' entire circumstances.

The traditional HUD (Department of Housing and Urban Development) reverse mortgages don’t adequately utilize the property value to make sense. That is where a proprietary jumbo reverse mortgage with a higher lending limit can be a safe and secure potential reverse mortgage loan solution.

Here are some real solutions to real problems.

Here are some examples of how we have worked with legal and financial professionals to assist their clients with this product. 

• A 91-year-old woman in Venice, CA. lives in a home worth $1.75 million. She got a loan for $1.1 million.
• An 88-year-old retired designer got $2.2 million on his $4.5 million home in Beverly Hills.
• A couple in their early late 60s in Saratoga, CA, got $950,000 on their $2 million home.
• An 89-year-old retired actor and his 73-year-old wife in Malibu, CA, got $1.79 million for their $4.2 million home.
• A couple in their mid-60s have a home in Los Angeles valued at $1.5 million and needed money to pay off bills and build an ADU that will create an additional $30,000 a year of rental income so they can both retire.

An alternative to traditional FHA-insured reverse mortgage
Using the borrowers' ages and the value of their homes the reverse mortgage lender determines the loan funds and loan-to-value ratios. Like a traditional reverse mortgage, a jumbo reverse mortgage loan to value is tied to the youngest borrower’s age. The borrower is usually responsible for property taxes and homeowner insurance. Without a monthly mortgage payment, the borrower is able to take care of these debts.

These reverse mortgages do not require private mortgage insurance (PMI) and are not regulated by HUD. These jumbo HECMs are available with fixed or adjustable interest rates and multiple reverse mortgage funding options, like a line of credit or fixed-rate cash-out loans. Using the Constant Maturity Treasury (CMT) as a baseline or benchmark, determines the jumbo reverse mortgage rates.

We use twelve different reverse mortgage companies for HECM loans and seven different companies for proprietary jumbo reverse loans. This allows us to offer many types of reverse mortgages that fit our clients' unique needs. 

Whether you're planning for retirement or settling into those long-awaited "golden years," you've probably had a long list of exciting activities, hobbies, or even travels you can't wait to cross off. How exactly do you intend to pay for them?

What if you, or someone you care about, have millions of dollars in untapped home equity while living on only social security and a small pension? Are you depleting the funds in your IRA or 401k plan? Are you making ends meet with credit cards each month? 

Do traditional reverse mortgages fall short of meeting your goals? Do you think a jumbo reverse mortgage line of credit will help you meet your needs?

Let's recap the features and reasons to consider a proprietary jumbo reverse mortgage.

• More Available Equity to older Adults with high-value homes
• Ability to eliminate larger mortgage balances
• No mortgage insurance premiums
• Robust borrower protections
• Greater flexibility than a HELOC
• You maintain full title and ownership of the home
• No monthly mortgage payment requirements
• Freedom to use reverse mortgage loan proceeds however you wish
• Higher lending limits
• Some of these programs are available starting at the age of 55 

Give us a call, and let us collaboratively design a proprietary jumbo reverse loan that can be a solution. 

Not everyone is eligible for a reverse mortgage. Along with age, there are a few other requirements for taking out a reverse mortgage loan.

• Your home must be your principal residence, meaning it must be where you spend the majority of the year 
• You must either own your home outright or have a low mortgage balance. Owning your home outright means you do not have a mortgage on it anymore.  If you have a mortgage balance, you must be able to pay it off when you close on the reverse mortgage. You can use your own funds or money from the reverse mortgage to pay off your existing mortgage balance  
• You may not be delinquent on any federal debt, such as federal income taxes or federal student loans.  You may, however, use funds from the reverse mortgage to pay off this debt 
• You may be required to set aside a portion of the reverse mortgage funds at your loan closing or have enough of your own money to pay ongoing property charges, including taxes and insurance, as well as maintenance and repair costs
• Your home has to be in good shape. If your house does not meet the required property standards, the lender will tell you what repairs need to be made before you can get a reverse mortgage loan
• You must receive counseling from a HUD-approved reverse mortgage counseling agency  to discuss your eligibility, the financial implications of the loan, and other alternatives

Give us a call or fill out a request to see if you qualify for a Hecm. 
​For eligibility considerations, see our In-Depth Information. 
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Your right to cancel a reverse mortgage:
In the majority of cases involving reverse mortgages, you will have three business days following the closing of the loan to cancel the arrangement without incurring any fees or other consequences. This is referred to as "rescission," which is your legal right.

In order to cancel, you are required to give the lender written notice. Send your letter by certified mail and ask for a return receipt so that you have record of the date you sent the notice of cancellation and the date the lender received it. Always be sure to keep a copy of any correspondence that you have with your lender. If you decide to cancel the reverse mortgage loan, the lender has twenty days to repay any money you've already contributed toward the financing of the loan.

​If you believe that there is a reason to cancel the loan beyond the initial three-day period, you should seek the assistance of a lawyer in order to determine whether or not you have the right to cancel the loan.

Note: This information only applies to Home Equity Conversion Mortgages (HECMs), which are the most common type of reverse mortgage loan.