Question:

Is it possible to refinance a reverse mortgage?

Answer:

To refinance a reverse mortgage, you need your house to have appreciated significantly since the last appraisal at the time of closing the reverse mortgage. Refinancing a reverse mortgage is done much like refinancing any other loan - with the hope of getting better rate and payments.

In the case of reverse mortgages, refinancing is worth mainly if your house is located in area with quick appreciation. Otherwise, the costs of refinancing may be too high to get into trouble. For example, refinancing a reverse mortgage on a $250,000 house may incur around $10,000 in closing costs. Is it a good idea to refinance a reverse mortgage? Yes, if your home value has risen with $50,000 or more. And time is working for you - not only has your house appreciated in value, but you have advanced into your retirement and will be eligible for a larger monthly payment.

Consider attending reverse mortgage counseling to get an idea of what your payment will be if your refinance. In some cases you may be seeing a 30% increase in your monthly payment, if you refinance a reverse mortgage.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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