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Can You Refinance a Reverse Mortgage?

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Can You Refinance a Reverse Mortgage?

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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. 

Key Takeaways

  • 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. 

While you don’t need to make monthly payments if you have a reverse mortgage, you must pay your property charges (taxes, insurance, any homeowner association fees, and maintenance) on time and keep the home in good condition to avoid default or foreclosure.   

What Is Refinancing?

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