If you are 55 years or older, you are eligible for a reverse mortgage, helping you boost retirement savings and maximize your benefits. But what exactly is a reverse mortgage?
A reverse mortgage offers older homeowners the flexibility to convert their home equity into cash. Unlike a standard mortgage where the borrower makes payments to the lender, a reverse mortgage requires the lender to make regular payments to the borrower. You can take this type of loan against your home in the form of monthly cash advances, a line of credit or both provided you keep your property insurance, taxes, and upkeep up to date. The balance of your loan is disbursed or becomes due once the last borrower dies or leaves the home.
But, can you refinance a reverse mortgage? Read on to find out.
Can You Refinance a Reverse Mortgage?
Like a traditional mortgage loan, a reverse mortgage can be refinanced, especially during the recent surge in the housing market. However, you must qualify for refinancing to take advantage of lower rates, better terms, and several preferred conditions of the new loan.
When refinancing your current reverse mortgage, consider doing so when the housing market surges. You can also qualify for reverse mortgage refinancing if interest rates fall since taking your original reverse mortgage loan.
Contact us today to learn more about how and when you can refinance your reverse mortgage.
Should You Refinance Your Reverse Mortgage?
Adding a spouse to your current reverse mortgage is among the leading reasons for refinancing. This ensures that the surviving spouse has a home if the borrower passes away or moves out of the house.
Refinancing your reverse mortgage can also be ideal when interest rates have dropped considerably since you received your existing reverse mortgage. Therefore, it is essential to consult your lenders on the upfront breakdown of fees and interest rates when refinancing your reverse mortgage.
When Can You Refinance Your Reverse Mortgage?
If the home’s appraisal value has increased, it would be the best time to refinance since you qualify for better interest rates. You can also refinance if you have added a spouse to the loan to avoid leaving them homeless when you leave the home or pass away.
Refinancing a reverse mortgage is essential if you have the right motive and fit the criteria. However, ensure you inspect your reverse mortgage documents to find out the fees related to prepayment and other associated guidelines before refinancing.
If you are interested in learning more about reverse mortgages or if you are eligible to refinance your reverse mortgage, contact the experts at Reverse Mortage 4U.