Can I refinance a reverse mortgage? Read here for ways that you can refinance a reverse mortgage if you feel your rates are too high!
While a reverse mortgage is a great financial product used by retired homeowners to tap into their home’s equity, many reverse mortgage borrowers realize that the loan may be expensive compared to other options. Luckily, there are various ways to refinance a reverse mortgage.
Refinance With a New Reverse Mortgage
The first way you can refinance a reverse mortgage is with a new reverse mortgage. Like with traditional mortgage, there are various lenders who are willing to offer reverse mortgages. To entice potential customers, many lenders offer lower interest rates than their competition. If you find a lower rate that you qualify for, it may be beneficial to refinance into a new reverse mortgage.
Refinance With a Traditional Mortgage
Another way you can refinance a reverse mortgage is with a traditional mortgage. Many mortgage lenders are willing to give “cash out” proceeds up to 75% of the home’s value. These proceeds could be used to pay off the reverse mortgage. This may be a beneficial option because interest rates are lower than reverse mortgage rates. The problem is that you will need to make monthly payments and will likely require a co-signor.
Refinance With a Home Equity Loan
The third way you can refinance a reverse mortgage is with a home equity loan or line of credit. These loans are similar to a “cash out” loan in that the amount available is based off of the equity in your home. While a line of credit will often come with higher interest rates than a traditional mortgage, the payments are more manageable because they only require interest to be repaid. The proceeds from a line of credit could be used to pay off the reverse mortgage.
Related posts: