Jumbo Mortgage Loan

 Financial Advisors, CPAs, insurance agents, real estate agents, estate planning attorneys, and in-home care providers in California need to know that there is a reverse mortgage alternative available.

The reverse mortgage alternative is called Equity Access. Equity Access provides monthly income to homeowners above the age of 60 (the youngest homeowner must be at least 60) in return for a share of the future value of the home.

Here are some of the features:

• There are no closing costs to enter into an Equity Access Agreement
• No debt is incurred with an Equity Access Agreement
• The homeowner does not have to pay off their mortgage(s)
• The homeowner decides how long they want payments for (from 10 to 25 years)
• The homeowner decides how much equity they want to share
• An attorney is required to review the Equity Access offer to protect the homeowner
• There are no income requirements

1. The age of the youngest homeowner
2. The value of the home
3. The amount of mortgage balance(s)
4. The type of mortgage(s)
5. How long they want payments
6. How much equity they want to share

All of this information is placed into the Equity Access calculator. The calculator then determines the monthly payment.

If the payment is less than what the homeowner would like, there are ways to manipulate the calculation. For example, the homeowner could agree to share a larger percentage of the future equity. Or they could shorten the term of payments to be received. 

There are probably other professionals that could benefit from this information. If you know of a certain type I missed, I would love to know.

Which is better, a reverse mortgage or Equity Access Agreement? Like any financial tool, one product may be more suitable than the other. But it's nice to know that senior homeowners in California now have an alternative.

Spread The Word!

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Jumbo Loan Blog

Normally, homeowners in Atherton don't want a 15 year fixed rate because the payments are too high. Now there is a twist on a 15 year fixed rate that can keep your payment low!

This loan has a 40 year term. Initially it is a 15 year fixed rate. During the 15 year fixed rate term, the payments are interest-only. Because the payments are interest-only, the payment is a lot lower than an amortized 15 year fixed rate. 

Here's the neat part - if you pay principal during the 15 year fixed rate term, the payment decreases because the payment is based on the reduced balance!

After the 15 year fixed rate term expires, the rate adjusts once. The rate is determined by adding .5% to the Fannie May 60 day rate.

The new payment is based on the new rate, amortized over 25 years. Hopefully you have paid off enough of the principal during the 15 year fixed rate period so that the payment doesn't increase! The new rate can't be more than 5% higher than the initial rate.

As you know, homes in Atherton are very expensive. This program works well here because the maximum loan amount is $5 million.

This loan program is available to purchase or refinance expensive homes, such as those located in Atherton. One of the nice features is that there is no limit on the dollar amount of cash-out. Many loan programs are limiting the amount of cash-out to refinancing homeowners.

Another nice feature is that this program can be used to finance second homes at a slightly lower loan-to-value percentage. It is one of the few competitive jumbo loan programs that I am aware of that allows cash-out on second homes.

If you own a home in Atherton or in other expensive areas of California, and like the idea of a 15 year fixed rate with interest-only payments to keep the payment low, contact me to see if this program is a good fit for you.

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Jumbo Loan Blog

The last thing you want to worry about when you own a vacation home in California is the loan you have on it. You own a vacation home because you want a place to relax, not to add stress.

As I was sitting at my desk looking at the terms of this loan, I thought "this is perfect for vacation homes".

The rate on this loan is fixed for the first fifteen years. Fifteen years is a long time to hold a loan - wouldn't you agree? You can own that vacation home for 15 years and not worry about the interest rate changing! This part of the loan is what provides the stability.

Now for the affordability - the payments are interest-only for the first fifteen years. Most people don't realize that if you pay principal on an interest-only loan, the payment is less the next month! You do have this option.A vacation home loan with a rate that is fixed and with a payment that can decrease - grab the sunscreen and the blender, does it get any better?

This loan is for all types of vacation homes, small and large. You can finance that condo in Palm Springs, or the estate home in Lake Tahoe. The maximum loan amount is $5 million.

What happens with this loan after fifteen years, you ask? Well, it adjusts once. Then the rate is fixed, and you pay principal and interest for twenty five years. Remember, the payment will be based on the balance at the time of change. So if you have paid any principal down on your vacation home loan, the new payment will be based on the reduced balance!

This loan for vacation homes in California is available to purchase and refinance. You can even take cash-out, you just can't borrow as much of the property's value. 

To me, I picture a vacation home as a place to relax. One of the goals my wife and I have is to be able to buy a vacation home for ourselves and seven children some day. You can bet I will get a loan like this - long term stability with affordability!

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