Can You Refinance A Reverse Mortgage? Yes you can refinance a reverse mortgage. Read here for why you should refinance!
One common questions that reverse mortgage borrowers have is whether they can refinance their reverse mortgage. Borrowers are able to refinance reverse mortgages and there are various situations when you should refinance your reverse mortgage.
Interest Rates Have Dropped
The first situation when you should refinance a reverse mortgage is when interest rates drop. While many reverse mortgages come with variable rates, lenders charge varying spreads above market rates. As reverse mortgages become more popular, lenders are bound to become more comfortable with the product. This will likely lead to lenders offering rates with lower spreads which could save you thousands of dollars.
You Need More Money
The next situation when you should refinance a reverse mortgage is if you want or need more money out of your home. While an individual only needs to be 62 to get a reverse mortgage, they will have a difficult receive a lot of money at that age. If you got a reverse mortgage when you were 62 and are now 10 to 15 years older, you could probably benefit by refinance your reverse mortgage. Since you are older and your home has possibly appreciated, you most likely qualify for more proceeds through a reverse mortgage.
You Want a New Mortgage
The third situation when you should refinance a reverse mortgage is when you want a new mortgage. A common complaint of reverse mortgages is that the borrower accrues a lot of interest. If you fear your mortgage balance is growing too quickly, you may want to consider refinance into a traditional mortgage. However, it may be difficult being approved for a traditional mortgage if you do not have a reliable stream of income beyond social security.
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