High End Mortgages Easier to Get

Things are looking up for buyers and owners of higher-priced homes: The jumbo-loan freeze is thawing.

After the bank scare began last fall, jumbos — mortgages bigger than what the government will buy or guarantee (between $417,000 and $729,750, depending on the location) — dried up.

Jumbo rates have not dropped, and the guidelines are so restrictive that's it's been in kind of a holding pattern. Rates on 30-year fixed jumbo mortgages averaged 6.52% recently, compared with 7.51% six months ago.

Limits on reverse mortgages rising, too:

The other bright spot for owners of higher-priced homes is this:  Reverse mortgages just became much more lucrative. Until recently, the Federal Housing Administration had a hodgepodge of county-by-county caps on the equity you could withdraw.

Now, the limits are higher. In November, the FHA went to one national ceiling: $417,000. This year, to stimulate housing sales, it raised the ceiling to $625,500.

Today, if you want a reverse mortgage on your high-end house, you can get — at age 70, for example (withdrawal amounts vary by age) — 65% of $625,500. Even if your million-dollar house is worth only $800,000 today, you'll get more from a reverse mortgage than you would've in its million-dollar heyday.

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