The idea of refinancing a reverse mortgage is not one that occurs to all seniors. It may be because they don’t know they can do it or because they just don’t have enough information to know if it’s the right choice for them. It’s important to make sure you have all the information you need before you make a decision about refinancing your reverse home mortgage. There are several things you want to consider as you conduct your research in order to assure you have enough information to make an informed decision.
There are several reasons a senior might want to refinance an existing Home Equity Conversion Mortgage though the most obvious one is the necessity for additional funds. Whether it’s because of added expenses or just things that you need or want to do is of little importance—the important issues is to obtain the information you need to know whether refinancing your current reverse mortgage will be beneficial.
If you have had your current reverse mortgage for awhile, you may find that the value of your home has increased. This single factor means there is a potential you will be able to obtain more cash from your home. Several things come into play in determining the amount of money for which you are qualified: age of the borrower, prevailing interest rate and the value of the home. The average reverse mortgage is forty to seventy percent of the home’s value with the highest amounts going to older homeowners.
The change in the maximum limit is also another good reason to refinance your reverse mortgage. This is especially helpful to those homeowners who have higher priced homes and obtained a reverse mortgage under previous limits of $417,000 or lower. Currently the limit is $625,500 until the end of 2009. However, Congress may revert back to the previous limit or may approve a different amount. The current limit also includes a ten percent reduction to the principal limit on a reverse mortgage.
Even if your current reverse mortgage was a lump sum payment, you can refinance and obtain a line of credit. A line of credit allows you to schedule payments on a regular basis or request the cash as you need it. The advantage to a line of credit is you only pay interest on the money you actually withdraw, so you can actually save money be refinancing a lump sum reverse mortgage into a line of credit.
Changes throughout the real estate industry and within the HUD provisions make it attractive for seniors to refinance one reverse mortgage to obtain another one. The additional cash you can expect to gain through this transaction will allow you to do many of the things you may not have been able to do otherwise. The key is doing enough research to allow you to make the decision that will meet your monetary needs for the present and avoid undue financial hardship on your family in the future.
A thirteen-year veteran of the mortgage industry, Robert Griffin specializes in reverse mortgages and has helped over 3000 Americans find financial security with a reverse mortgage. The owner of Griffin Financial Mortgage LLC, based in Fort Worth, Texas, his memberships include the National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the National Reverse Mortgage Lenders Association (NMRLA) and the Better Business Bureau (BBB). Robert Griffin is also co-author of “62 Senior Moments.” If you would like more information, please call (866) 683-3690 or visit our Reverse Mortgage Calculator.
Tags: Reverse Mortgage
