America’s #1 Rated Reverse Lender

Hello Henry,

There are always costs involved with originating a loan.  The question is whether the lender can pay those costs on your behalf based on how much those fees will be and the anticipated income on the loan. 

You need to be very careful as some originators who send out thousands and thousands of refinance solicitations offer a no-cost refi which doesn’t exist so what they mean is that in many instances they will raise the rates on the loans to you so that they can make enough money on the loan to pay the fees for you. 

In some cases, the costs are genuinely low enough though that paying those costs on behalf of the borrower is not unheard of at a competitive rate.

So how do you know what they are offering?  COMPARE!  Don’t take the very first deal you are offered and make sure you are looking at the whole picture.  Don’t look only at the bottom-line dollars for the fees, look also at the amount of money you will receive and the rate and margin the lender is offering. 

A higher margin means you will accrue more interest on the loan for the life of the loan, potentially costing thousands of dollars more for your “free” loan.  The originator should be happy to give you a written proposal of the rate and all fees. 

We have an online calculator that allows borrowers to look at rate and fee options here where you can see actual costs in real time for your area.  Be sure the no-cost option you are looking at doesn’t end up costing you far more in the long run.

Hello Lynda,

I can’t really answer this because I can’t see what they see.  There may be questions in the title, your home may be in a trust that may have other questions pertaining to the will, are they really asking for the will or do they just need the trust because that is how you wish to take title and the will is a part of the trust? 

I can’t answer any of those questions with just this information but your loan officer should be able to tell you why they are requesting information as well as exactly what they need. 

It is ok for you to push back a little and make them explain to you what they need and why but you need to understand that ultimately, they may need to stick to their request or you may need to find another lender (and if it is something that every lender is going to need anyway, that would be a colossal waste of time). 

Try to get them to tell you exactly what they are asking for and why and you may find that they can get other documentation instead or that the will isn’t really what they need.

There is no doubt that the entire industry is pushed right now and lenders are taking longer than ever due to the fact that every service they rely on also is behind but 5 or 6 months is not typical unless there is something that is holding up the progress.   I don’t know if anything held the loan up prior to them ever being able to start though. 

Remember, lenders cannot order services or even start the loan process until the counseling is done or they have your signed application and authorizations so if you delayed those items, it would delay their ability to perform.  They also may have run into appraisal or title issues but they certainly should have been able to convey those to you when they arose. 

There is no reason that heavy volume alone would create this much of a delay and the loan officer should be able to tell you what exactly the status is at this point. 

Hello Joan,

There is no process required to “renew” the loan.  Once you have a reverse mortgage, it is valid until paid off and there is no renewal needed as long as you still have the loan.

If you do pay the loan off or move, you would need to get a new loan but as long as there is no outstanding loss on the first loan, you can always get another reverse mortgage (you are not limited to just one).  And if you mean can you refinance the loan, yes you can. 

You would still need to qualify under the current HUD loan terms but many borrowers are refinancing their loans in the low interest rate environment we find ourselves now – especially since housing values have gone up so much recently. 

If this is something you think you might be interested in checking into, you may want to look sooner than later as rates have started to inch up lately and higher rates can mean less money to borrowers.

Hello Geraldine,

I wish you had come to us a lot sooner than this for guidance because you are cutting things too close.  You are in danger of losing your home from two different angles and I hate to see anyone in this predicament.  The terms of your reverse mortgage state that you must keep your taxes and insurance current, or the lender can call the loan due and payable for tax default and if you cannot pay the balance in full, they can begin foreclosure proceedings to protect their security.  These terms are in all loans, not just reverse mortgages because taxes are a prior lien to mortgages.

You can refinance a reverse mortgage, but it doesn’t sound like you have sufficient equity at the numbers you state.  Plus, if your taxes are currently delinquent, HUD would not require any lender to set funds aside to pay the taxes and insurance in the future in the form of a Life Expectancy Set Aside (LESA or “Lee-Suh”). 

This is where funds are set aside from the loan proceeds to pay future installments of taxes and insurance that allow borrowers who would otherwise be turned down for the loan due to non-payment or late payments of taxes and insurance, qualify for and receive the loan.  But unfortunately, your equity position is not very strong and there is not a lot of room for a reverse mortgage at all let alone one to pay outstanding taxes and set funds aside for future installments.

As much as it pains me to offer this advice, I would advise you to consider selling your home before you can experience a tax event or lender default.  If you cannot pay the taxes now, the chances are good that the future will bring more of the same and at least if you sell now, you still have equity in the property and you would not be moving with nothing.  If you wait until there is a tax default and a forced sale, you would also be under more pressure to accept a faster sale and not necessarily the most favorable terms for you.

I would strongly suggest that you discuss this issue with your family or trusted financial advisors.  The last thing you want to do is wait until you have no options, and you are quickly coming to that point. 

I would invite you to check our website to see what your numbers look like for your age, your property value and the amount you owe if I am reading your comments incorrectly and you are not currently late on taxes and have not been in the past 2 years and then if you feel a refinance is in your best interest, there will be an opportunity to go from there.  Just be sure that if this is the route you decide to take, that you will not be in the same position in a couple years with even less equity and no options at that time. 

You can even choose to speak with HUD counselors if you do not feel like you have family or other advisors you can talk to and they can be found on HUD’s website at https://www.hud.gov/sites/dfiles/Housing/documents/HUD_HC_FacingForeclosure.pdf

Whatever you decide to do, please do not put it off.  You have options now and you should act while the choices are still yours to make.

Hello Larry,

HUD has no minimum time but rather uses benefits testing to determine eligibility.  Lenders and investors are tasked with making sure that they are not engaging in a process known as equity stripping by continually refinancing existing loans and adding additional costs into new loans. 

To meet industry requirements, most ethical standards have been set at 18 months minimum unless there are extenuating circumstances, or the new loan really benefits the borrower(s). 

If you are 18 months or longer since you closed your last loan, you would only need to pass the HUD benefits tests but if you are less than 18 months since you closed your last loan, the lender should make very certain that this loan really benefits you and that they are not looking to close a new loan just to close a new loan. 

If an originator is too eager to close a loan less than 18 months’ old that does not benefit your circumstances greatly, you may not want to deal with that originator.

Hello Mary,

Always remember that when someone tells you that you “can” refinance a loan in 18 months, that is based on all of today’s information and no one can tell you what the rules, the interest rates or the values will be at that time. 

Yes, you can refinance the loan in the future but if rates go up, if values go down or if HUD changes the program parameters, the amount available in 18 months may not make a refinance viable (even if you “can” do it).  No one can accurately tell you what you could get in 18 months. 

They could tell you today what you might get based on today’s rates and today’s parameters but that is just a shot in the dark 18 months from now.  I would never suggest that you go into a transaction with the thought that you had to do a refinance in 18 months, or it doesn’t make sense for you to close today. 

You need to look at the loan as it stands today and ask yourself if you want to do the loan based on those numbers.  In 18 months if the value, rates, and program parameters are such that you decide you want to refinance to a new reverse mortgage (and yes, the old loan is paid off with the new loan), then you can make that determination at that time based on the current information. 

But do yourself a favor and do not take the loan today thinking you will refi later and that you need to because that loan may not be available at a future date at terms that make sense for you. 

If today’s loan would not give you everything you need it to do with a refinance being just a little better, you may want to reconsider the loan altogether because if you do the loan and can’t refinance later, requiring you to sell the home as a result, that would be an awful waste.

Hi Wanda,

It very well could.  You must occupy the home as your primary residence to be eligible and you will be required to present your ID as part of the loan package. 

California has rules about updating your Driver’s License information if you have moved and Arizona also requires people who have established residency for more than 7 months during any calendar year to obtain an AZ license. 

I do not know how long you have owned the AZ home, but if it is your current primary residence, it would make sense for you to have an AZ license, especially since all the fees in AZ are also so much lower than in CA. 

Unless the move to AZ was within the past 10 days (the CA requirement for notification), an underwriter looking at your loan request would probably rightly ask why you would not want to immediately change all vehicle registrations and license information to the state with the much lower costs unless that state was not your state of primary occupancy. 

In that case, you would not be eligible for the reverse mortgage and so their concern would be warranted.

Hello Mark,

Rates are lower and I would bet the MIP renewal is also lower now as well (the current MIP renewal rate is .5% while most outstanding loans have a renewal rate of 1.25%). 

Whether or not you can receive any additional money would depend on your circumstances and to determine that, you need to send in your most recent monthly statement along with the month and year of birth for all borrowers on the loan and let us run the calculations. 

Refinances are a little different than first time loan and require a little more review to make sure it meets all HUD requirements but we can let you know quickly, show you what you might expect to receive with your refinance and then it is up to you as to whether you wish to proceed. 

You can start by visiting our refinance calculator. Or call us at 800-565-1722. 

Hello Arlene,

You can put the title back into your names as individuals or the change in the trust may be as easy as a very simple amendment. 

Either way, it is your choice, and either is acceptable.  Trusts are allowed if they meet HUD requirements and most trusts do but occasionally, we do run across trusts that have a provision that violates the HUD requirements. 

Most of the time, the requirements are there to protect borrowers so you may want to see what the change is before you decide to take the title out of the trust. 

It may be just as easy and better for you in the long run to leave the title in the trust but to add the amendment with the change.

Hello Jeanie,

Yes, your son may live with you while you have a reverse mortgage.  Putting his name on a utility bill would not be a real issue if you make sure you are living their full time as your primary residence and most of your documentation does verify this information. 

If your son is under 62, he will not be on the new loan and it will not change your qualifications. 

If he is on title and is over the age of 62, then the loan would be based on his age and he would be a borrower on the loan unless you removed him from title before you started the application process.

Hello James,

It depends on the defects.  There are some items that HUD will require you to repair, especially if the item is considered a health and safety issue and some items that will be taken into consideration with the condition of the home and considered in the overall value but not requiring repair.  

For example, if your home needs painting, that may just be considered in the value estimate but if there is chipped and peeling paint, it would need to be repaired/painted. 

HUD has multiple manuals that either deal with property requirements or appraisal requirements that I could not begin to go into in this forum, but if you are concerned that you have specific issues with your property you can always contact a lender and ask in advance. 

Most of the time the lender can tell you if the deferred maintenance items would require repair but not always.  There are times when it depends on what the appraiser says in the appraisal as to what the lender will require. 

And it could also be possible, depending on the issues, that an inspection by a licensed professional in that specialty is required (as would be the case with possible roof issues). 

Unfortunately, there is no one answer that can be given to blanket all circumstances in this area.

Hello Tina,

The loans are sold into mortgage backed securities and therefore the only way to reduce the rate would be to refinance it.  

Hello Leonard,

Your first loan would be finalized and therefore, the lender that held the loan being refinanced would be required to supply you with all the pertinent tax and other documents. 

Hello John,

Lenders do not use assessors’ assessments; they use an appraisal performed by a licensed appraiser in accordance with HUD requirements.  Assessors often use other measurements and are under restrictions as to when and how they can raise values for assessment purposes and may not be up to date on their assessment or could be continuing increases after a market has stopped appreciated as the assessed values “catch up” to market values to the rules allowed for taxation.  

Having said that, the chances are good though that if those values are rising, you may also have a higher market value and may qualify for more money on a refinance of your current loan.  The only way to know for sure though is to check with a lender while you have a current statement available on your existing loan so that we can verify the benefits you could expect to receive with a new loan today based on the recent sales of similar homes in your area.  We can usually do this with online information quickly and without cost, so it is worth giving it a shot.  Check our HECM refinance Calculator found here.  It never hurts to try and there is no cost, hassle, or obligation.

Good Morning,

I am not sure if you are asking if you can refinance the loan, sell the property and get another reverse mortgage or if you can get another loan after you have a reverse mortgage on the property.  The answer to all three is yes you can, but it has its own restrictions or requirements. 

For example, if you want to put a junior behind an existing reverse mortgage, your reverse allows it, but many lenders will not because the reverse mortgage balance grows over time.  If you do find a lender willing to go into secondary lien position though, the reverse mortgage does not prohibit a new loan behind it.

You can always sell your home and as long as the current reverse mortgage is paid in full with no losses, you are eligible for another reverse mortgage.  You can do this as many times as you wish, there is no limitation.  You may only have one reverse mortgage at a time though.

HUD does allow you to refinance your existing reverse mortgage with a new reverse mortgage if you meet their requirements.  The new loan must give you certain benefits, they will not allow you to refinance the loan with a new reverse mortgage if the new loan does not make sense (give you ample benefits based on the cost of financing). 

You can always refinance your loan with another loan type without penalty.  There is never a prepayment penalty on a reverse mortgage.

Hello Tauna,

6% currently is a pretty high rate.  You can investigate a refinance and if you qualify, you may be able to get more favorable terms. 

About taxes, you should check with your tax accountant or trusted tax professional but for the most part, interest is deductible when paid and borrowers are deferring the interest most often with a reverse mortgage. 

To determine what you can deduct in your circumstance, you really need to contact your tax professional.  As for your loan., please feel free to visit the calculator on our website at https://reverse.mortgage/refinance-calculator to see if it makes sense for you to consider a refinance. 

Remember, it needs to really be a benefit to you to refinance and just a slightly lower rate is not typically enough, but you never know until you check.

Hello Rosalyn,

HUD does not allow lenders to refinance a loan that early on because they deem it a form of equity stripping to constantly refinance loans.  I think they would be right if you had to pay for another loan this early on and you must remember that if one loan resulted in cash out under HUD’s guidelines, they have different rules for paying it off with a reverse mortgage anyway.  I think your best bet would be to contact a company that does repairs for FHA purposes. 

A company that does this may well be willing to complete the repair now and carry the cost until you are eligible for the next payout on the loan.  The repair might be a little more expensive that from a contractor who was expecting to be paid immediately upon completion, but you can certainly shop around and check references.  Also, if you consider the costs of getting another new loan, the added expense of using an FHA repair company willing to carry the cost of the repair until you are eligible for your next draw might be less than the added costs of another refinance anyway.  I think if you do an internet search under FHA Contractors, there will be several listed depending on your area and even services like Home Advisors may be able to help.  It’s worth checking out.

Hello Marge,

Keeping in mind that a reverse mortgage never gives you more than a percentage of the value of the home, depending on your age, that percentage will be limited.  The older you are, the more you would receive under the program, but you have two things working against you.  Firstly, the jumbo programs do not give borrowers quite as much money as a percentage of the value of the home to begin with and HUD’s maximum lending limit is $726,525 which means that you do not get any more money for any value that exceeds that amount. 

If we look at your example, to get another $300,000 on top of the $500,000 you already owe, that would give you a loan amount of 110% of the maximum HUD lending limit which would not be possible.  A jumbo program does not limit the value, but the jumbo also would not give you 80% loan to value and that is what you would need in order to pay off your current loan and receive another $300,000 – in your current property.

You do have another option, but it would be entirely up to you as to how feasible it is.  With $500,000 equity, you could sell your current home, downsize and purchase a new home with the reverse mortgage purchase program and could easily have money left in the bank.  You would no longer be living in a million dollar property but you may just be able to find a property that does a great job of meeting your needs, may even be in a location that is more beneficial for your current needs, might have lower maintenance or utility costs and may just allow you to finally resolve distance or other needs your current home has been unable to meet.

I know most of us get very comfortable in our homes and the prospect of moving is never a fun one, but if it makes all the sense in the world and frees up the cash you need to keep being independent and comfortable, it is an option.

Hello Susan,

The loan is not inexpensive to establish in that you have all the normal costs of a loan transaction as well as the HUD Up-Front Mortgage Insurance Premium.  But you do not have to pay all these costs out of pocket.  Typically, the only costs you must pay for certain are the counseling and possibly the appraisal, but lenders can often work with you on all or part of the appraisal so that you may not have to pay it all up front.  You do not have to pay all the costs in advance though and most can be financed in the loan.

Hi Connie,

The short answer is yes, you can refinance a current reverse mortgage and they will consider the current value when determining your new loan/benefit amount.  But the longer version is that you must remember that the “difference” will not be $120,000.  When you get the reverse mortgage, you only receive a percentage of the home’s value based on the HUD parameters in effect at the time, your ages, the property value and the interest rates so the best-case scenario is that you would only receive a portion of that additional equity in the new loan. 

Since you last received a reverse mortgage, your home value has increased, but the HUD parameters have changed so that borrowers do not receive as great a benefit as a percentage of the value of the home as they did in 2012, HUD lowered the “floor rate” on the program so that interest rates now affect the amount received more heavily than they did in 2012 when the floor rate was a little over 5% and most rates were under the floor.  These changes will combine to give you an overall lower benefit under the current reverse mortgage parameters which means that you would realize even less of that additional $120,000 increase in value. 

How much would you end up with?  You can visit our calculator on line and plug in your information (your zip code, how much you owe and your ages) and the calculator will let you know what you would expect to receive with real time costs for your location if you did do a refinance.  You do not have to supply personal information like social security numbers or anything to see if the refinance would work for you and there is never any pressure if you decide it is not right for you.  You can access the online refinance calculator here.

Hello Maria,

To be able to do a refinance, you have to meet the HUD requirements under the current HUD parameters.  To see if you do, the best thing would be to visit our refinance calculator here.  I suspect your balance may be $678,000 and not $678.00 and if that is the case, you would not get enough from the program to pay off the current loan under the program but it is free to find out, we don’t need any personal information like social security number, etc. and it doesn’t hurt to find out!

Hello Mark,

In a perfect world, yes, you can refinance your current reverse mortgage and if the lender now determines that the flood insurance is no longer required, they would not need you to purchase the coverage.  I need to give you some cautions though. 

Firstly, in order to do a reverse mortgage refinance, the new lender must be able to do two different “benefits tests” that must be met with the new loan or HUD will not allow the loan to be closed. 

The first is a 5 times test comparing the cost to the new proceeds.  If your new loan will cost you a total of $4,000 to receive (between origination fees and third-party costs you can get there quickly), the new loan must give you at least $20,000 additional reverse mortgage proceeds available.  The second benefit test is usually a bit easier for most borrowers to hit and that is a 5% benefit of the principal limit. 

In other words, if your Principal Limit is $200,000, you must be able to receive at least 5% of that amount or $10,000 in new proceeds.  Most refinances requested to meet the 5% rule but with the recent cutbacks to the program, many do not meet the 5 times benefits rule.

Let’s also talk about the LOMA or LOMR – Letter of Map Amendment or Letter of Map Revision.   There are times, especially if your property consists of several acres, where it is not readily discernable if portions of the property or improvements are still in the flood area.  If this is the case your property, then you will have the same issue with any lender.  If, however, it is very clear that you are not in the flood hazard area based on the amendment, I would certainly advise you to keep trying. 

I would advise you to ask your servicer who issued the flood certificate and send the LOMA directly to the issuer of the flood cert and request that they revise the certificate to indicate that the property is not in a flood hazard area.  Once the lender has a flood certificate in their possession that states that the property is not in a flood hazard area, they should then no longer have any reason to require it. 

You can refinance a reverse mortgage with a new reverse mortgage but HUD will only allow it if it makes sense.  In other words, if you receive enough money from the new loan that the benefits outweigh the costs (they usually consider a 5 times or more return of the costs).  The issues you may run into is that HUD has lowered the benefits available to borrowers several times over that 6 year period and interest rates are higher now (the higher the rate, the less money you receive under the program).  Unless your property has increased in value, there may be no money available on a current refinance.

You can always go to our website and plug your figures in to see if the refinance will work for you.  The website address is https://reverse.mortgage/refinance-calculator and you will need your current statement as well as a good idea of the value of your home.  If you aren’t sure and need a little help, we would also be happy to look online for you and see if we can find some recent sales of similar homes in your area which would give us a good idea of your home’s current value.  Let us know if we can help.

Hi MaryAnn,

Yes, you can refinance a current reverse mortgage with another reverse mortgage if the equity position is high enough so that the loan makes sense.  You can determine whether or not the loan would make sense in your case simply by running the numbers on our online calculator at https://reverse.mortgage/refinance-calculator.  There is no cost or obligation to determine if a refinance would work in your case.

There are other options open to you if you decide that the refinance does not work for you, especially if you are in a home that would have to be considered for a jumbo or proprietary reverse mortgage.  If the refinance does not work, you might consider downsizing and using a reverse mortgage to purchase a smaller, less expensive property.  Many borrowers use this strategy to buy smaller homes or homes that are closer to family that also allow them to reduce costs and pull cash out for living expenses.

Some look for homes that might better suit their needs such as one story properties, homes that are handicap accessible or one that no longer requires yardwork, etc.  Whatever your reasons, if a move is something you might consider as well, you can also use the calculator to determine what would be needed for down payment and closing costs and what that would leave you liquid from a sale of your current residence.  And the best part is, you would still have a reverse mortgage on the new place so still no monthly mortgage payment. 

Hello CJ,

There is no way to simply “add” a borrower to an existing loan.  The only way you can accomplish what you are looking to do would be to refinance the loan in both your names now after he adds you to title.  He can add you to title which would ensure that you have the property if something were to happen to him without refinancing the loan, but that would not guarantee that you can stay in the home as the loan would become due and payable if he should ever stop living in the home as his primary residence.

If he just adds you to title, while you would retain the home if he passes before you, it would require that you take steps at that time to pay off the reverse mortgage by refinancing the loan or selling the home.  If you want to be sure that you do not have to take any action at all in the event something happens to your husband, that would require a refinance at this time in both your names under the current HUD program parameters.

If you would like to see what you might expect to receive under the current HUD guidelines and the current property value, please don’t hesitate to visit our HECM refinance calculator.  It is quick and easy to use and there is never any cost or obligation. 

Hi Norman,

I see no question here but if you are wondering if you can refinance your loan, you might be able to.  The only way to know for sure under the current HUD parameters is to visit our Hecm Refinance Calculator and check to see if a refinance would work for you.  We will pull up sales in your area of similar homes (no just listings since a listing will not support a value for lending purposes) and also take a look at the costs and use the other information you supply (not a lot, just your ages, the zip code where the property is located and the balance on your current loan) to see if a refinance at this time would work for you.  It’s quick and no hassle or obligation.  Come visit us and see if a refinance is right for you.

Hello Salty,

The higher value would help, especially if you received your original loan a while ago when the HUD lending limits were lower.  The only way to know for sure would be to run your circumstances through my online, real-time calculator to see if a new loan would be beneficial for you. Check it out our online calculator to see if a refinance would be in your best interest and how much money you would receive. 

If it would not work for you, there are still options, but that would require a sale and a downsize to a less expensive home, financing them with a new reverse mortgage.   I would suggest that you check on the refi first if your current home still meets all your needs and it is your desire to remain in that home. 

Hi Chuck,

You did not tell me what your age is or when your wife turns 62.  If you are over 62, you would really be better served if you could wait until she is also 62 and she will also be on the loan.  If you are also under 62, that would make both of you ineligible at this time.  My suggestion would be for you to visit our free, no hassle online calculator and there you can get some real-time figures and see what you can expect to receive.  There is no obligation and no one will pressure you to do anything.

Hi Cheryl,

If he does a refinance with you on the loan after you turn 62, you would have access to the loan.  If not, you are considered a non-borrowing spouse and while if you are an eligible non-borrowing spouse you can remain in the home for as long as you live and abide by the terms of the loan as well, you would not have access to the reverse mortgage loan itself. 

Hi Sheila,

The line of credit grows on the unused portion so if you don’t use all the money available to you, the line grows and there is more money available as time goes on, whether the value of the property goes up or not.  However, if you use all the funds available to you so that there is no line growth, the only way to get additional funds after that would be to refinance the loan.  To do that, you would have to meet the new parameters based on the then-current guidelines, your age and the property value at that time.

Hi Bill,

There are a number of factors that go into the HUD calculations to determine how much money borrowers receive.  Any new loan has to also pay off any accrued interest and depending on how long you have had your loan and how much money you took on the line, you may have accrued a small or large amount of interest.

Also, HUD has changed the program in recent years so that borrowers now receive less money as a percentage of the value than in the past. When you add this to the fact the interest rates have risen and borrowers receive less money with higher rates, refinances of reverse mortgage loans becomes increasingly difficult even when the value increases.

Hi Charles,

Unfortunately there is no provision to add new borrowers to existing loans.  The program would not work if you could keep adding borrowers to the loan after the benefits had been calculated based on known actuarial tables.

You can however refinance the loan with a new reverse mortgage refinance in both your names. You need to know though that since you had the last loan with your mom, you had to be the younger borrower and now that your spouse is 12 years younger than you, the available Principal Limit or loan amount may be less than when the first loan was closed depending on what the value was then versus what it is now.

The only way to know for sure is to visit my online calculator and see the results for your information.   It's free and doesn't take much time. I don't need your personal information, just month and year of birth, property value, zip code and a little info from your most recent reverse mortgage statement in the case of a reverse mortgage refinance.  Come take a look, it might work well for you!

Hi Larry,

When it comes to adding people to title after the reverse mortgage has been completed, the loan documents specifically address this issue and are very clear.  As long as mom is still on title as well and continues to live in the home as her primary residence, she can add you to title with no adverse effect whatsoever.  Regardless of what your intent is later, as long as mom is still living in the home and the title is not changed so that she is removed (you are just added in addition to), the loan would not be in default.

Hi Linda,

HUD has certain rules regarding refinances that you must meet but if you do and the loan makes sense for you, you can refinance your reverse mortgage with a new reverse mortgage.  You can visit our online hecm refinance calculator to determine if a refinance under the current parameters would work for you. 

Hello Larry,

If your loan was originated after 2014 and your wife is an “eligible non-borrowing spouse”, meaning they took her age into consideration when they determined the benefit amount, then she can still stay in the home for life even after your passing.  If you received your loan prior to that time and her age was not considered, then the only way to keep the loan after you pass with just her on the loan would be to refinance. 

Since you have already stated that refinancing is not an option, there are a couple of other courses other borrowers have taken.  Some have chosen to sell their homes and buy using a reverse mortgage on the new home purchase.  If your spouse is over 62 now she can be on the loan or at worst, she can be an eligible non-borrowing spouse and either way, she can stay in the home for life just by meeting the same criteria as you (live in the property as her primary residence, pay the taxes and insurance, etc.).  This might be a good way for you to find a home that meets any special needs that your current home does not (single story, closer to family, downsize if your current home is too large, etc.) and you would be able to use a reverse mortgage to purchase the next home.

The next option that one borrower with a non-eligible, non-borrowing spouse described to me is an insurance policy he obtained to cover all or a portion of the current loan so that his spouse can either pay off or down the existing loan.  This plan would require that you are eligible for insurance at this time but you may not need as much as you think.  You might not have to  have a policy great enough to pay off the entire balance of the reverse mortgage but rather only the shortfall of whatever would be needed so that your wife would be able to refinance into a reverse mortgage in her name.  I think this is a tougher target to hit with real estate values, interest rates and HUD changes all being moving targets, but he felt that the worst case was he would leave his spouse with cash if for any reason he miscalculated and the best case was that  his spouse could refinance the reverse mortgage in her name with the insurance proceeds paying any necessary shortfall at the time.

Hi Michael,

I follow you completely and the answers all depend on circumstances.  Are you on title to the property?  I gather from your post that you were not at the time of the loan but there is no reason you cannot be added at this time which would secure your position in the home.  It would not, however, keep the lender from calling the loan due and payable if your wife were to pass.  To be certain you could live in the home for life would require that you refinance the current loan with both your names on the title (if you are over 62, you would also be on the loan) and then there would be no problems.  The HUD lending limit has gone up to $679,650 but HUD has also lowered the amounts they give to reverse mortgage borrowers as a percentage of the home’s value since then so I do not know how when combined with interest that has accrued and your current ages, that will even out.

The best way to determine if that will work for you is to visit our site for a free, no obligation HECM refinance calculation or call us Toll Free (800) 565-1722

Hi Linda,

The answer to the first question is easy.  You can add your spouse back to title at any time without consequence and I would suggest that you do so as soon as you are able.  The documents state that as long as you remain on title, you can add others as well, you just can’t change title in a way where you are no longer on title as well (and you must continue to live in the home). 

The second half of this I could not answer without looking at your loan documents.  If you closed the loan within the past 2 years, your spouse is probably an “eligible non-borrowing spouse” and in that case, as long as he has been living in the home and continues to do so, with the title in his name as well, he can live in the home for the rest of his life even if something were to happen to you.  If however you closed this loan before HUD changed to the rules and started considering the ages of the non-borrowing spouses and had the eligible non-borrowing spouse designation, then once you were no longer living in the home, the loan would become due and payable forcing your spouse to refinance the loan, pay the loan off with other funds or sell the home.  If the spouse is not an eligible non-borrowing spouse and you wish to now refinance to add your spouse, you would have to meet the current HUD guidelines and you can visit our hecm refinance calculator and it will tell you whether or not you would meet the HUD requirements for a refinance.

Hi Julie,

You and your husband can refinance the loan at this time, whether you are now over 62 or not and you would receive protection either as a reverse mortgage borrower (if you are over 62) or as an eligible non-borrowing spouse (if you are still under the age of 62).  The biggest concerns that might impact you are the value and the amount you owe on the first loan.  If you are contemplating a loan now, if your value has not risen, you could have a difficult time receiving enough money on the new loan to cover all the amounts owed on the existing mortgage.  However, since 2008, the maximum lending limit has risen dramatically from $417,000 to $679,650 so if your home value is near the top of the range or if it has risen from the time the first loan was obtained, you may be ok with the new limits.  Either way though, you won’t know until you check!

Please feel free to go onto our secure, online refinance calculator, All Reverse Loan Optimizer – ARLO.  ARLO will allow you to run scenarios with no obligation and with real time costs in your area so that you can see what is really available to you.  You can visit ARLO by clicking here.

Hi Norma,

She can take any money available to her up to the limits of the original loan.  If she had a line of credit available to her from which she has not drawn, her available loan amount has also grown and she can take that money at any time.  If there are no additional funds available on that loan, just like any other loan, to be able to take more money now above and beyond the original limits would require a refinance of the loan.

Hi Pam,

As long as the loan meets the minimum HUD requirements for minimum benefits to the borrower(s), 3 years is fine to do the loan now.  18 months is the minimum time you must wait before doing a refinance of an existing reverse mortgage, 12 months if you are refinancing a forward or traditional mortgage in which you took cash out on that loan and there really is no waiting period to pay off a traditional forward mortgage on which you received no cash out of the transaction (including payoff of debts because that is considered cash out).

Hi Darlene,

The MIP rate would depend on when the Case Number was obtained and under what parameters your loan is being originated.  For example, loans with Case numbers issued prior to October 1, 2017 are still are the higher amounts and the renewal premium is 1.25% of the outstanding balance.  Case numbers obtained after this time would receive less benefits available as HUD changed the program but the initial MIP would likely be higher (depending on the amount of the line used in the first 12 months and how much was paid on the first HECM Loan closed) but then the renewal MIP would be at a reduced rate of .50% of the outstanding balance. 

It’s a bit complicated to go through in a short blog question but if you contact our office, we would be happy to determine which benefits pertain to your circumstances and give you the exact numbers.

Hi Sonja,

The reverse mortgage is a loan just like any other loan.  If you took out a reverse mortgage in 1985, you paid off any other loans at that time but you do have the reverse mortgage and the balance owed would be the amount that the lender shows on your monthly statement.  To determine if a refinance is in your best interest now, take a look at your most recent statement and use the total outstanding balance when asked what the loan balance is for the calculation.  Also, check your statement to be sure that you don’t have any money left on your current line of credit.

If you are still unsure as to what numbers to input, please don’t hesitate to call our office at 800-565-1722 and we will be more than happy to run those numbers for you.  Same no obligation, no hassle service and we will not push you for a lot of personal information we don’t need just to give you an answer.  Let us know if we can help.

Hello Ida,

Of course you can.  Your mom owns the home and she would have to deed the property over to you to enable you to obtain a loan (no lender will lend to you using a property for security that is in someone else’s name), but she can certainly do so if that is her desire.  In fact, once parents with a reverse mortgage pass, the children or heirs often seek financing to refinance the loan in their names to keep the home at that time as well.  There is no reason you can’t do it sooner if that is what you and mom would like to do.

Hi Bob,

A borrower with a reverse mortgage, just like any other loan, has always been free to refinance through any lender of choice, you are not restricted to going back through your existing lender.  The only restrictions you have are those HUD places on all borrowers/lenders to ensure that the refinance loan makes sense and is in the borrower's best interest.

Hi Patsy,

It is "possible", but I always warn borrowers that the combination of the interest you are accruing as well as HUD requirements make a refinance much more difficult than many of the letters make it sound.  Another thing is that HUD just cut way back on the program so effective with all loans starting on October 2, 2017, refinancing to receive more money will be even more difficult and almost impossible for most borrowers.  If you are considering it, check the numbers soon because after this month, it will be a whole lot harder.

Hello Armida,

HUD has requirements you must meet but yes, you sure can if you meet those standards.  Give us a call when you have your most recent statement handy and let us see what we can do for you.

Hello Wayne,

HUD did raise the limit a few months back but it was not a huge raise.  HUD issued Mortgagee Letter 2016-19 on December 1, 2016 which raised the limit from $625,000 to $636,150 effective with all case numbers assigned on January 1st 2017 and after.  The property has to 1) be valued over $625,000 or the increase does not affect you and 2) you only receive the percentage of the increase that you receive as a percentage of the value based on your age under the program.  In other words, at this point in time a 62 year old borrower receives 52% of their value for properties valued at or below the HUD maximum lending limit, minus the costs to receive the loan, so the increase to borrowers would be their respective benefit amount based on the age of the youngest borrower.

The increase if not a big one from the standpoint that it will not place a lot of extra funds at your disposal, is a big deal from the standpoint that it is the first increase in the limit since 2009.  So although the increase was not significant in the terms of dollars raised, it is very significant in the terms of an increase in limits that was not the result of a stimulus package or other perceived "emergency" measure.

Hello Fayed,

HUD does not have any set waiting period but the National Reverse Mortgage Lenders Association (NRMLA) and all the reputable companies approved through them do recognize an 18 month period during which the lender may not refinance the loan except for extenuating circumstances.  Unfortunately, some originators in both the forward and reverse mortgage markets participate in a process known as refinance "churning" that hurts seniors by stripping the equity if they keep charging fees.

Some originators try to justify their actions by telling borrowers that they will cover the costs of the loan and therefore the equity is not unduly under assault, but what they don't tell you is that those investors who purchase the loans in the secondary market see the loans paying off rapidly and then the pricing for the loans becomes much less favorable.  The result?  The rates and fees start to rise as the investment in the mortgage backed securities becomes a less favorable one and all borrowers pay higher costs all around on every new loan closed.  Those originators still try to churn the same loans over and over and all borrowers wind up paying higher fees and rates and never even know why.

Reverse mortgages are nowhere near the size market as the forward mortgage market and the churning was taking a toll.  NRMLA saw the harm this was doing to borrowers in the long run just so that some originators could continually churn refinances and determined that an 18 month restriction on refinances was needed to ensure the secondary market would be available for all borrowers in the future.  If you feel that you truly have extenuating circumstances though, you can still check to see if you can do your refinance at this time if it has been less than 18 months since you closed your loan.

Hi Christine,

HUD does allow refinances as long as the benefit to the borrower meets their requirements.  And yes, the word is that they will be changing the condominium approval requirements but that has not happened as of this time and we are not sure if it will take place before they make their year end changes next September.  There was some talk of it happening in April but it never materialized so we know there is a push to make it happen, just don't have the particulars or timing yet.

Hi Bonnie,

Every time a reverse mortgage is originated, a new appraisal must be completed.  This is true whether it is a previously non-borrowing spouse or the original borrowers - we still have to do the appraisal from an FHA approved appraiser.

The mortgage insurance premium or MIP would not be eliminated with the refinance.  All of the HUD Home Equity Conversion Mortgages (HECM or "Heck-um") require the MIP until the loan is paid in full.  Refinancing the loan would pay the first loan off but would start a new loan which would also require FHA/HUD Mortgage insurance.  The only way to eliminate this charge entirely would be to pay the loan off without starting a new reverse mortgage loan.  Whether or not the refinance would actually benefit your rate would be a question of comparison but rates have risen in the past 18 months, they have not dropped so I don't know if a refinance will help you there either. 

However, the only way you will know for sure is to request a proposal.  When checking about the viability of refinancing an existing reverse mortgage, the lender needs the usual information but also needs a copy of your current reverse mortgage monthly statement and it really helps if you have a copy of the closing statement from when you closed that loan.  The information we need to determine if you meet all the HUD requirements can be found on those two documents as well as in public records and we will be able to let you know if a refinance will work for you.

Hi Marilyn,

It is very possible and I would encourage you to request a no-obligation, no cost proposal from our website Here.  We will be glad to let you know and there is never any undue pressure or hassle.  

Hi Jennifer,

I would need more information to determine whether or not mom is eligible for a refinance of her HECM loan, I would invite you to visit our website and request a free- no obligation quote based on all the factors.  I would caution you though, if something happens to mom, the loan would become due and payable and this is something that both of you should consider since it might affect your future living arrangements if you are not able to refinance the loan later and would have to sell the house and move at that time.

Hi Barbara,

Absolutely can.  You can pay off your current reverse mortgage loan by selling or refinancing at any time with no penalty.

Hi Linda,

I'm not sure how to answer this because I'm not really sure I understand your circumstances.  Are you saying that you have a reverse mortgage now?  And if you are making payments, to whom are those payments being made?  The refinance is not your safety net because if you've been delinquent on taxes, HUD now requires a set aside to pay the taxes and insurance and if you're telling me you have no equity in the home, you would not qualify for the new reverse mortgage plus the Life Expectancy Set Aside (LESA).  However, if you are paying the taxes and are on a bona fide repayment schedule, my advice would be to contact your servicer and make sure that HUD is also aware of the fact that you are bringing your taxes current by agreement.  I don't know your circumstances and cannot speak for your lender or for HUD but I have seen borrowers enter into repayment agreements to catch up on the taxes in other circumstances in lieu of foreclosure and it just might work for you as well.

Hi Lana,

HUD does allow for this under certain circumstances.  The only way to know for sure is if you send your current statement, the age(s) of the borrower(s) to us and let us pull some sales from your area to determine if the refinance will work for you.  HUD requires that the benefit of doing the new loan is great enough when compared to the costs and the only way we can tell you for sure is by having all the information which also includes the new appraisal but we can usually get a pretty good idea just by looking at the recent sales in your area.

If you would like us to check, you can always scan and email the current statement, fax it to us at (800) 565-1968 or give us a call and we will take the information over the phone.  Any way you choose, we are not a high-pressure lender, if we can do it we can usually do them at drastically reduced fees and if it works out for you great but if not or if you change your mind, we won't be pressing you to do the loan anyway!

.

Hi Delilah,

If you refinance your reverse mortgage with another reverse mortgage, you will get a credit for the entire portion of the initial mortgage insurance premium that you paid and it will go toward the new loan.  For example, if you paid $5,000 initial premium on your first reverse mortgage and the second reverse mortgage would be $6,000 under the normal premium guidelines, you would receive a $5,000 credit of the amount already paid and your premium on the new loan would be just $1,000.  If however the new premium amount is less than the old amount you originally paid, then there is no additional credit but you would not have to pay the initial premium a second time.

Hi Bill,

What you are asking about is called a reverse mortgage refinance where you can at times take advantage of a higher appraised value. We would pay off the old reverse with a new one if there is a present benefit.

Feel free to use our online reverse mortgage refinance calculator or message us your current payoff amount and address. 

Hi Tom,

Once you sell your current home and pay off the reverse mortgage that you have now, you can get another reverse mortgage on another property.  The amount that you will qualify for will be the same percentages that borrowers refinancing receive, the only difference will be that you will have access to 100% of the Principal Limit or loan amount to use for the purchase.  However, that Principal limit will be about 61.4% of the purchase price of the home or the appraised value based on the ages you supplied, whichever is less and then there will also be the costs of the purchase and loan.  So yes you can get the loan, but it will not be for 80% of the purchase price.

If this still sounds like something you think you might want to explore, my suggestion is to obtain a proposal based specifically on your circumstances and the costs in your area and then determine if it makes sense for you.

Hi Peter,

HUD has some very specific requirements in order to do what is called a HECM to HECM refinance (in other words, a refinance of your current HUD Home Equity Conversion Mortgage or HECM with a new HECM loan).  To be able to determine whether or not you would meet these parameters, we would need to see your most recent statement on the existing loan and from there, we can see if a HECM to HECM is possible.  Can you send us a copy either by scan and email, fax or even a picture with a smart phone?

Hello,

A Refinance of your current Reverse Mortgage is possible.  In order to Refinance your existing Reverse Mortgage to a new Reverse Mortgage, the new loan would have to provide a significant financial benefit to you according to the HUD guidelines.  We have written articles on this previously.  Please see the following link below and if you want to go over your specific scenario please give our office a call to go over the numbers with your most recent mortgage statement available to reference.

Thank you

Hello Kay,

Yes this is what is called a reverse mortgage refinance. If there is enough benefit to you in a larger reverse mortgage with enough new home appreciation what we can do is pay off the old reverse with a new one using the current appraisal and hopefully even get you a lower interest rate at no closing costs.

If you would like a quote please complete this form and be sure to add in the notes that you have a reverse mortgage balance to payoff. 

Hello Lorenzo,

Yes you may apply for what is called a reverse mortgage refinance providing that you still have enough equity in your home to qualify and that the new reverse mortgage offers you better terms than your current reverse mortgage loan. You can request your quote by completing the form below and please make sure you indicate in the notes that you have a reverse mortgage currently.

https://reverse.mortgage/quote

Hello Ronald,

In order to protect your spouse in the event of you passing away before her you will need to refinance your reverse mortgage adding her to the reverse mortgage loan since the loan only becomes due and payable after the last surviving borrower should pass. I would recommend requesting a quote from our website here https://reverse.mortgage/quote and please indicate in the notes that you have a current reverse mortgage that requires refinancing. We will be happy to return you a HECM Refinance quote. 

Hi Robert,

The HUD rules are very explicit on the refi of an existing reverse mortgage and you would have to request a proposal from us to see if your mom would even benefit from a refinance at this time based on what she obtained, what she owes and what the new benefits would be based on current program parameters.  With a balance of $400,000+, I would not lie to you, not many borrowers will qualify for a refinance at this time.

Also, we can discuss the legal requirements to be able to do the loan and it would depend on whether or not mom had a power of attorney to you prior to the onset of the illness.  If not, it would take a court appointed conservatorship to proceed and for that, you probably would want to seek the assistance of competent legal counsel.

No one can be added to an existing reverse mortgage.  If your mom is over the age of 62, they can refinance and add her on the loan as another borrower but if she is not, they will now consider her a "qualified non-borrowing spouse".  This is good and potential bad in this.  The good is that a qualified non-borrowing spouse does not have to leave the home if something happens to the borrower.  The potential bad is that they will also take her age into consideration now since she can live there for the rest of her life as well and the amount available under the loan will be far less for a borrower who is not yet 62 than it was previously for a borrower over the age of 62.  If your dad took out the maximum amount of cash and has accrued interest on the loan, chances are good that unless the values have increased dramatically and still remain under the HUD maximum lending limit of $625,500, there will not be enough benefit in the refinance proceeds to pay off the existing mortgage.

The only way to know for certain is to request a no-obligation proposal based all of the current information at reverse.mortgage.

Hi Jon,

Very possibly, but the only way to know for sure is to look at the full picture which would include verifying the benefits you received on the first loan compared to what you would receive with a refinance.  All you need to do is send us a copy of your current statement, your birth date (or birthdates if more than one borrower) and let us see if the numbers work out for you. 

It doesn't cost anything to run the numbers and it is a no pressure, no obligation inquiry.  We would be happy to let you know what you can expect with a refinance of your current reverse mortgage.

Hi Nancy,

HUD has requirements that must be met in order to be able to refinance the loan meant to protect borrowers from refinance churning that might result in equity stripping of the home on repetitive fees on multiple refinances, etc. but as long as you meet the parameters, yes, you can refinance a reverse mortgage with another reverse mortgage (and you can always refinance with a standard or forward loan at any time without prepayment penalties if your circumstances changes and you decide that is a better way for you to go as well).

Borrowers can live in their home mortgage payment free, regardless of what property values and equity positions do.  If your equity runs out or the values drop, you can still live in the home and you still have access to all the funds guaranteed in your line of credit under the program as long as you continue to meet the program requirements (at least one original borrower still lives in the home as their permanent residence, you pay your taxes and insurance in a timely manner and you maintain the property). 

Hi Angela,

There are tests or restrictions that must be met but you can refinance a reverse mortgage if you do meet the requirements.  The new loan must provide the borrower adequate benefits.  Those benefits can vary based on circumstances though so you really need to check with a lender to determine whether or not your loan would be eligible.

Hi Jim,

That's a loaded question if ever I have heard one!  Just like "beauty being in the eye of the beholder", "better" is dependent on your wants and needs and what you consider a better deal.  Reverse Mortgages can be refinanced, whether or not it's a better deal that what you currently have would depend on in what area you were trying to better your circumstances.  HUD will not even let us refinance an existing reverse mortgage unless it meets a number of tests that benefit the borrower.  Whether or not you would meet those tests will depend on when you closed, what the value was at the time and what it is now and also what the HUD maximum lending limit was at that time. 

Then you have to look at the rates that you received then versus the market today (including the HUD mortgage insurance renewal premium if that has changed) and make the determination of whether or not it is a better deal for your circumstances with regards to rates.  Or maybe for you, better is just being able to access more funds or a higher monthly payment.  Or perhaps better is allowing a previously non-borrowing spouse who was too young to be able to get on the loan.  There are a number of circumstances that could make it "better" for you at this time.

The bottom line is that HUD does allow the loan to be refinanced under certain circumstances but you have to put in a request for a proposal to see whether or not you meet the HUD requirements and whether those terms and circumstances are better for you based on your desired goals.  It doesn't cost a dime and if you choose a company like ours that is not high pressure and is only looking to be certain your needs are taken care of, we'll be happy to tell you what we can and cannot do from the start and you can make an educated decision.

Hi Gloria,

Yes, you can refinance an existing reverse mortgage loan but there are other considerations that you and the lender must keep in mind other than just the increase in value.  The biggest things to remember are that the new loan cannot be started within 18 months of the close of the old loan and there are certain tests that the loan will have to meet to be certain that the benefits are great enough for the borrower.  Your lender can run the numbers for you quickly but to do so, they will need you to have your current reverse mortgage statement available.  If the loan meets the required tests in order to be originated, they can let you know very quickly.

Hi Jeanne,

The answer is simple and I don't know why they would not tell you on the phone when you called.  The people who send out all those cards and letters are just doing a mass-mailing and they do not know who does and who does not qualify when they go out, they just pull your name and address from public records and know that you have a reverse mortgage from the Deed or Mortgage that recorded with the loan.

The same ad goes to all the borrowers in a given area and like a fishing expedition, they keep throwing their line in the water and hope they get a bite!

To let you know if you qualify, you have to have had your current loan for 18 months or longer and have enough equity in the property so that the new loan will get you a certain amount of money based on the cost to do the loan.  If the equity is not there or the cost is too great to do the loan, then lenders cannot do a new loan and they can tell you that within a few minutes. 

Learn more about refinancing your reverse mortgage here: https://reverse.mortgage/you-can-refinance-reverse-mortgage or call us at (800) 565-1722

HUD does set a maximum that lenders can charge for the loan, but that is the only involvement or limitation on the pricing that they have.  Each lender sets their own pricing based on the cost of their funds, their operation, required profit margins, etc.  It is always prudent to compare and shop between different companies to see the best possible pricing you can get.  I also recommend that you do a simple internet search once you are considering a few different lenders.  Just the phrase "... lender complaints" with the lender's name at the front may tell you volumes about the companies with whom you are considering working. 

Not all lenders are created equal, even if they are offering the same FHA-insured loan!  If one lender can save you thousands of dollars and maybe a lot of grief as well, it might be worth 5 minutes of research in the beginning.  We would love to have you compare our rates and fees to anyone.

It's not that it is all that difficult, you just have to have enough equity and many borrowers have not seen enough appreciation in their homes yet to make it work (especially since the amounts borrowers receive under the program have been reduced in recent years).  It doesn't hurt and it doesn't cost a dime to go online and see that the calculator says for your potential benefits and then you can decide it it's worth pursuing further from there!

Hi Carole,

I'm sorry for your loss.  The actual answer is yes, you can refinance and can get more money, but the value has to have gone up enough to where the value will support the new mortgage and give you new benefits of at least 5 times the cost of the loan.  For example, if the cost of the new loan is $5,000 (and you do not have to pay the amount of the initial mortgage insurance premium that you have already paid), then the new loan must net you at least $25,000 in additional benefits.  Otherwise HUD considers the loan not to be adequate benefit for the borrower and will not let us do the refinance.  If you can send us a copy of your most recent statement along with your date of birth and the date that you took out the first reverse mortgage, we can determine if there is a possibility of doing the refinance.

Hi George,

Yes you can and the Initial Mortgage Insurance Premium (IMIP) that you paid for the first loan does not have to be paid again on the refinance.  You would be responsible to pay the difference between the higher amount on the new value and what you had already paid, but you would not have to pay the portion you had already paid a second time.  For example, if your IMIP on the initial loan was $6,000 but because the new value was so much higher, the new IMIP is $9,000, you would not have to pay the $6,000 that you had already paid, but would only be responsible for the difference of $3,000.

I do need to let you know that HUD has a rule that is known as the "5 Times Benefit Rule".  In short, it means that HUD will not allow lenders to do refinances for you unless the benefit to you for the new loan nets you 5 times or more the costs to get the loan.  This is done for a specific reason, HUD does not want people contacting reverse mortgage borrowers to try to get them to constantly churn refinances that do little or no good for them.  This way the loan must make sense for the borrower or it cannot be done. 

Some other things to keep in mind are maximum lending limits, interest rates in effect at the time, other HUD parameters, etc.  There may be a variety of reasons that would not make a refinance a benefit or even a possibility and you should not go into the transaction thinking that the refinance is a given.  We absolutely do them and during times of appreciation or when HUD raises the lending limits, they have been more plentiful than at other times.  Conversely, when rates rise, HUD cuts the limits back or the values drop, fewer borrowers will qualify for a refinance.  Just know that the answer is yes, you can always refinance the loan if the equity is there and the benefits are there, but you have to go into the loan not counting on a subsequent refinance as too many things can change in the future.

Hi Lisa,

HUD has some definite requirements that lenders have to meet in order to be able to offer a refinance of a reverse mortgage and many properties do not qualify because they have not gone up in value enough from when the loan was originally closed to where it makes economic sense (let alone meet the HUD requirements).  However, depending on where your parents' home is, what the value is now, what it was when they took out their loan and what the HUD lending limits were at the time, a refinance may just work for them.

The lending limits changed for reverse mortgages for the first major time in 2008 with the Home Economic Recovery Act (HERA).  Prior to 2008, HUD had different lending limits by county all over the nation and some of the limits were much lower.  Even in the highest counties, prior to HERA, the highest lending limit was $362,790 (except for some high cost areas like Alaska and Hawaii and this would not affect your parents).  So if your parents' home was worth and continues to be valued above the limits in effect at that time, there is a possibility that a refinance may work for them.  The only way to know for sure is to contact us and let us look at the current balance on their loan, the property values in the area and do a quick analysis.  You never know until you check.

A reverse mortgage can be refinanced but only if the loan meets certain benefit tests for the borrower. HUD will not allow originators to refinance reverse mortgages for little to no benefits for the borrowers. If you are unsure if you would derive adequate benefits to refinance your reverse mortgage, you can contact a reverse mortgage specialist and with just a small amount of information, they can let you know. You would need to have your current statement as there is information on it that they will need; a copy of your closing statement from your existing reverse mortgage is extremely helpful as he/she will need to know how much Up Front Mortgage Insurance Premium (UFMIP) you paid on the first closing, and an approximate value of your home.

At that point, they can run the numbers and determine if the refinance is even in your best interest. Remember, some costs like the amount of UFMIP that you already paid would not have to be paid again, but you would have to pay title fees and other closing costs and depending on the area in which you live and the value of your property, these can still add up to more than $5,000 in some parts of the country on higher valued properties. A quick review does not cost you anything and at that point you would know if it makes sense for you. Give us a call at (800) 565-1722 or request a quote by clicking on the header link of our site, we’re happy to run you an analysis.