Having enough funds to support long-term needs is an ever-increasing concern for seniors. Those who purchased their home in booming housing markets, like California, may find themselves house-rich and cash-poor. This means that they have more equity locked into the value of their home than they have in liquid assets. Reverse mortgage loans were created specifically to help seniors liquidate their home equity and turn it into usable funds for a more comfortable retirement.
Starting January 1, 2020, the loan limits for traditional Home Equity Conversion Mortgages (HECMs) will be increased and capped at $765,600, almost $40,000 more than last year. What does this mean for a house-rich, cash-poor senior?
- Those who own homes with values around $750,000 or more may be able to receive more funds now than ever before.
- An existing reverse mortgage borrower may be eligible to refinance their current loan to tap into more equity.
- Homeowners that didn’t qualify before because their existing mortgage was too high (their loan-to-value ratio) may be eligible now because a higher appraised value could be used instead of the previous cap.
Furthermore, for seniors with home values above $765,600 some lenders have proprietary jumbo reverse mortgage products available. These are specifically designed to help owners of higher-value homes convert a portion of their home’s equity into the funds they need in retirement. With a jumbo revere mortgage, retirees can access the equity in their home while eliminating monthly mortgage payments as long as they continue to live there.1
Want to see how you can tap into your home equity with a reverse mortgage? Call (800) 976-6211 to speak with a licensed reverse mortgage loan officer to see how much you may be eligible to receive.
Disclosure
1 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.