Some new news on the jumbo for the first time in a long time. The jumbo reverse mortgage is currently offered by two lenders. When I made the move from traditional mortgages into reverse mortgages back in 2007 there were a couple proprietary reverse mortgage products that had good rates and loan to value amounts. At the time they were very attractive to the people with a home value of two million and higher. In the years since we have seen fewer lenders offer the loan and even a period where it did not exist at all. The jumbo reverse has always been a niche product but has never seen high usage.
In recent years the rates on the jumbo reverse have been as high as 8.875% fixed. On the jumbo there is no upfront mortgage insurance premium like on the traditional reverse which is a nice savings. Still 8.875 Fixed was a tough pill to swallow. Then the jumbo went away for a little bit entirely when Generation Mortgage left the business. Soon Finance of America and then AAG came out with their own jumbo reverse. They both had a 7.75% fixed rate which is a good amount lower than the previous 8.875%. Other than that they were pretty similar with the exception of a few lender overlays that fluctuated how much the borrower gets.
Just the other day Finance of America announced it was lowering the rate on its jumbo loan to from 7.75% down to 5.99% which is huge. Looks like the change does not change LTV amounts or fees. I expect AAG to follow suit soon but we will have to see about that. While loan to value amount are still lower on the jumbo than previous incarnations they have improved in recent years and with the new lower LTV amount just put out on the HECM reverse mortgage (with people getting 20% or so less cash out) the jumbo is looking more popular even for this with values as low as 500k. We will have to see if more proprietary products start popping up. As always please call of message me with questions. Thanks for reading.