Should I consider refinancing my reverse mortgage loan?
As the Inflation Reduction Act makes its way to the U.S. Senate for approval, the majority of Americans are hoping the bill’s passage will ease concerns about surging prices. Over the past year, the nation’s Consumer Price Index rose by 9.1% — the largest jump in over 40 years.
For reverse mortgage holders, the question becomes, “Would refinancing my reverse mortgage loan help improve my financial position during periods of high rates of inflation? The answer depends on your reasons for refinancing.
If interest rates have dropped significantly since you closed on your reverse mortgage loan, refinancing may be an attractive option for two reasons — a lower interest rate reduces the amount of interest the lender adds to your loan balance, as well as reducing the rate at which your equity decreases.
Other reasons to check out reverse mortgage refinancing:
The value of your home has risen. In this case, refinancing may allow you to tap into more of the equity you’ve built up. You can use the funds for expenses such as home renovations, repairs or in-home care, safeguarding your investment portfolio so it can continue to earn interest.
Your current loan has an adjustable interest rate. Though adjustable rate reverse mortgages provide greater flexibility in how you choose to receive your funds (monthly payments, a line of credit or a combination of the two), they also have a degree of uncertainty as your interest rate fluctuates based on economic conditions. By refinancing to a fixed-rate reverse mortgage, you gain the security of a locked-in interest rate.
You want to add your spouse as a borrower. If your spouse didn’t meet the age requirements when you originally closed on your reverse mortgage loan, you became the sole borrower. To add them as a borrower, you’ll need to refinance the loan. (Note: In the case of HECM loans, certain protections are available for non-borrowing spouses.)
A different type of reverse mortgage would better serve your needs. If you’re living in a higher-value home, you may be limited in the amount of equity you can turn into a loan. With a typical Home Equity Conversion Mortgage (HECM), the current maximum reverse mortgage limit you can borrow against is $970,800, even if your home’s appraised value is higher.
With the Equity Elite® program exclusively from Reverse Mortgage Funding (RMF) as the lender, the maximum loan amount is up to $4 million.*
RMF is one of the nation's top reverse mortgage lenders, servicing more than 84,000 reverse mortgage borrowers. Our goal is to help older Americans experience the retirement lifestyle they’ve always dreamed of. If you’re considering refinancing your existing reverse mortgage, we’d love the opportunity to help. Give RMF a call at (888) 277-1567 to set up an appointment with a local loan specialist in your neighborhood.
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.5-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.
*Not applicable in all states; MA imposes a maximum loan amount of $2MM. More information here.