A Homeowner’s Guide to Bay Area Jumbo Reverse Mortgages

Jumbo reverse mortgages are a popular, equity-based financing option in the San Francisco Bay area. That’s because we have relatively high home prices here in the Bay Area, and the jumbo reverse mortgage allows homeowners to tap into more of their equity.

But what is a jumbo reverse mortgage, and how does it work? Is it the right home equity financing strategy for you? Here’s a quick guide to jumbo reverse mortgage loans in the Bay Area. If you have any questions after reading this article, please reach out to our staff.

The Jumbo Reverse Mortgage Explained

A reverse mortgage is a special type of loan that allows you to convert your home’s equity into cash. It’s called a “reverse” mortgage because instead of making monthly payments to a lender, the lender makes payments to you.

You receive a loan based on the amount of equity you have in your home, and then you receive monthly payments from the lender. The loan is paid off when the homeowner moves out of the home or passes away.

That’s the “reverse” aspect of it. Now let’s talk about the “jumbo” component.

In the Bay Area, many reverse mortgages are limited to a certain amount. For example, the popular Home Equity Conversion Mortgage (HECM) offered through the Department of Housing and Urban Development allows eligible homeowners to turn their equity into cash. But there are limits to how much you can borrow using this particular product.

A Bay Area jumbo reverse mortgage, on the other hand, is one that exceeds the borrowing limits imposed by the HECM program. These loans allow homeowners with high-value properties to access a higher amount of their equity, compared to what’s available through the HECM.

The loan limit for a standard HECM reverse mortgage rose to $970,800 in 2022. Borrowers seeking a reverse mortgage for an amount higher than this limit might benefit from using a jumbo reverse mortgage. These products allow for a much higher level of equity conversion.

A Popular Option in the Bay Area

In the Bay Area, homeowners with multimillion-dollar properties could use a jumbo reverse mortgage with proceeds well above $1 million. In some cases, homeowners could receive up to $3 million when using a Bay Area jumbo reverse mortgage.

The amount you can borrow using one of these products will depend on the amount of equity you have in your home, your age, and other factors. Please contact us if you have questions. We are located in the Bay Area and serve borrowers across the Golden State.

Not All Lenders Offer Jumbo Reverse Mortgages

It’s important to realize that not all mortgage lenders in the San Francisco Bay Area offer jumbo reverse mortgage products. This is a specialized product geared toward a particular type of customer (seniors with significant home equity). As a result, some lenders offer jumbo reverse mortgages while others do not.

Here at Bridgepoint Funding, we operate a mortgage broker type of business. This means we have access to a large number of lenders offering a broad range of financing products. Some of our lending partners offer jumbo reverse mortgages to Bay Area homeowners. So if you have questions about these products, or if you would like to apply for one, please contact our staff.

How You Can Use the Money

One of the benefits of using a jumbo reverse mortgage is that there aren’t any limits on how you can use the money. Homeowners in the San Francisco Bay Area use reverse mortgages for many different purposes.

They can be used to finance the following types of expenses:

• Living expenses
• Travel-related expenses
• Long-term health care
• Medical procedures
• Vacation homes or other real estate investments

This is just a short list of some of the more common expenses that can be covered by using a jumbo reverse mortgage. The reality is you can use the money however you like.

Rising Home Prices & Equity in the Bay Area

There’s more good news for Bay Area homeowners seeking a jumbo reverse mortgage loan. Home prices in our region have risen substantially over the past few years – and especially during 2021. According to Zillow, the median home price for the San Francisco-Oakland-Hayward metropolitan area rose by abound 17% in the past 12 months alone.

Depending on how long you’ve owned your home, your equity might have increased substantially from the time you bought it. This could put you in a good position for using an equity-based financing product, including a jumbo reverse mortgage. Generally speaking, the more equity you have in the home, the more you are able to borrow when using a reverse mortgage loan.