Can I refinance a reverse mortgage? Questions and truthful answers the lender doesn’t want revealed.
A reverse mortgage is a tool for seniors over 62 to access the equity in their home. They can take a lump sum or monthly checks. This is an increasingly popular product for seniors who need additional income and don’t want to sell their home.
Can I refinance a reverse mortgage?
For those who already have a reverse mortgage, this is a common question. The simple answer is yes, although the borrower needs to think about why they want to refinance, and if it is beneficial to them in the long run. If your home has increased in value, interest rates dropped, or you have aged, then you may qualify for a refinance.
How will refinancing a reverse mortgage benefit the borrower?
Suppose a borrower took out a reverse mortgage ten years ago at age 62. Now he has aged ten years, making his monthly payouts higher since the bank is ten years closer to accessing his home when he dies or moves. Also, most likely his home has increased in value, that coupled with the age difference should allow that borrower extra cash in his pocket.
Is refinancing a reverse mortgage a good choice?
A reverse mortgage is comparable to a conventional mortgage in terms of fees and closing costs. Therefore, a borrower should not enter into a refinance unless the benefit greatly outweighs the cost. A good rule of thumb is if the payout will be more than three to four times the fees associated with the refinance.
Can I refinance a reverse mortgage? Absolutely, as long as you meet the requirements of age and equity, and will benefit from the decision, a refinance may be a smart choice to access more cash in your retirement.
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