Can You Refinance a Reverse Mortgage?
Many homeowners refinance their traditional mortgages to obtain more favorable terms as they pay down their home loans. However, it’s also possible to refinance a reverse mortgage—a loan that lets older adults tap into their home equity without selling or making monthly payments. Here’s how a reverse mortgage refinance works, and when it might make financial sense to refinance one.
- A reverse mortgage lets homeowners age 62 or older access their home equity without selling the house or making monthly payments.
- The loan’s repayment is deferred until you sell the home, move out, or die.
- Refinancing replaces an existing mortgage with a new loan that offers better terms.
- Reverse mortgage borrowers might refinance their loans to get more cash, secure a lower rate, or add a spouse to the loan.
What Is a Reverse Mortgage?
A reverse mortgage lets homeowners age 62 or older tap into their home equity. Unlike a traditional (sometimes called “forward”) mortgage, in which you make regular payments to a lender, a reverse mortgage means the lender makes payments to you. The loan and interest become due when you sell the house, move out, or die.
What Is Refinancing?