What is a Reverse Mortgage?

Currently, there are two main types of reverse mortgages widely used: Home Equity Conversion Mortgages (insured by the FHA for age 62 and older) and Jumbo or portfolio reverse mortgages (for age 55 or older).

While FHA Reverse Mortgages have been available for 30 years, portfolio reverse mortgages have emerged as a newer option for owners of high-value properties, gaining popularity over the past decade due to their flexible program choices.

The availability of portfolio reverse mortgages is particularly advantageous for homeowners who have witnessed substantial growth in their property values in recent years. Homeowners with properties valued around $1,000,000 or higher often find this to be the most effective way to incorporate their home equity into their retirement plan.

Many Financial Planners recommend portfolio reverse mortgages as a tool that allows senior clients to access a significantly larger portion of their home’s value.

These mortgages are specifically designed for homeowners with higher-valued properties that exceed the maximum value considered by FHA when calculating loan amounts ($1,089,300). Thus, they enable homeowners to tap into a greater portion of their home’s value. Individuals over the age of 55 who possess substantial equity in more expensive homes are considered ideal candidates for portfolio reverse mortgages.