Reasons to Refinance Your Reverse Mortgage

Reasons to Refinance Your Reverse Mortgage

For seniors who already have a reverse mortgage but need additional funds it can be worthwhile to refinance the existing loan rather than go into debt by borrowing money. It is even more advantageous if the value of your home has increased since the commencement of your first reverse mortgage loan. You can then take out a new loan at a higher amount than your original one and do those things you need to do. Whether it's home repairs, a new car or just traveling with the additional funds you can obtain from refinancing, it should provide you the money you need.
While real estate values in many areas have been declining or remaining stable, if you have had your current reverse mortgage for awhile, it is likely the value of your home has increased enough to make refinancing your existing loan worthwhile. In addition if you took a lump sum payment with your original loan you may want to consider a line of credit that will allow you to take either regularly scheduled payments or allows you to withdraw whenever you need some extra cash.

For those homeowners with higher priced homes the change in maximum limits also makes refinancing your current reverse mortgage attractive. If you took out your current mortgage under the previous limits of $417,000 or lower you may want to refinance while the limit of $625,500 remains in effect. After the end of 2009 it is uncertain what the maximum limit will be as Congress may choose to extend the current limit, they may reinstate the previous limit of $417,000 or they may choose something in between.

Keep in mind also that you have grown older since you took out your original reverse mortgage. This brings you into a new category and qualifies you for a higher reverse mortgage because of your age. While the total of a reverse mortgage can fall anywhere between forty and seventy percent of your homes value, older seniors will be able to obtain more because of the fact they have fewer years left in which to draw against the loan.

Changes in the interest rate may also make it advantageous to refinance an existing reverse mortgage since the amount of cash for which you qualify will be based on several factors including the interest rate in effect at the time. Interest rates on all mortgages have declined since the beginning of the 21st century and with declining interest rates senior homeowners can obtain a higher reverse mortgage.

Whatever reasons you may have for needing to refinance your reverse mortgage, you want to make sure you time it so it is to your advantage. For instance, don't wait until after the first of the year to see what Congress is going to do about the current maximum limit but do it now while you know it is still $625,500, especially if you have a higher priced home. There may be circumstances that require immediate attention but if you have the option refinance when the real estate market will provide a higher home valuation and while the maximum loan limitation is higher.

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 if you would like more information, please call (866) 683-3690 or visit our Reverse Mortgage Calculator