Refinancing Your Reverse Mortgage

Refinancing Reverse MortgageA reverse mortgage is an excellent way to free up funds by borrowing against the equity you have built up in your home. While it is a helpful tool and can allow you to cover large expenses, it is still a loan — one that you will eventually have to pay back with interest. Luckily, similar to traditional mortgages, you can refinance your reverse mortgage to take advantage of lower interest rates. In today’s blog, Family Home Loan Texas discusses what you need to know about refinancing your reverse mortgage. 

What Is Refinancing?

Before diving into refinancing a reverse mortgage, it is important to have a grasp on refinancing, itself. It is when you update the terms of your mortgage — typically to take advantage of lower interest rates. You can also do so to switch from a fixed interest rate to an adjustable rate (or vice versa). It can also allow you to add another person to the mortgage that was not there when it was initially taken out. Ultimately, it is typically done to save money by lowering the amount of interest you’ll have to pay over the life of the loan. That said, there are still closing costs and you will have to pay around 4% of your mortgage’s principal cost. Overall, you just need to make sure you will be saving money in the long run.

Why Refinance A Reverse Mortgage?

For starters, you should do so to save money. Changing the terms of this type of mortgage is similar to doing so for a traditional one. If it has been several years since you closed and interest rates have lowered, then refinancing is likely a good move. Similarly, if you determine that switching to a fixed-rate mortgage from an adjustable one is financially beneficial, then you should look into it. 

It Is Helpful For Spouses

As noted above, refinancing can allow you to add an eligible spouse to the mortgage, and this is particularly important with reverse mortgages. The loan must be paid back when the holder leaves the home or passes away. If a spouse is not on the mortgage, then they will have to leave and could be responsible for paying it back. If the mortgage is refinanced to include their name, they can keep living in the house without having to pay it back in full.

Call Us To Learn More About Refinancing A Reverse Mortgage

If you have questions about any step or part of reverse mortgages, please do not hesitate to call us. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about a reverse mortgage loan.