Can I switch to another reverse mortgage lender?

Question

Funds available are $170,000, but the interest is killing me at $704 per month. Is there any way to curtail the rise of interest? I’m taking out $1,500 monthly, and the interest is $700...ouch!..... Can I switch to another reverse mortgage lender?

Michael G. Branson · Accepted Answer

Yes, you can switch lenders, but the only way to do it is by refinancing into a new reverse mortgage. There’s no “transfer” process as you might see with other types of loans. You start a brand-new reverse mortgage, and the new lender pays off your current one.Whether it’s a good idea depends on what you’re trying to accomplish.When refinancing can make senseA refinance may be worth looking at if:Interest rates dropYour home value has increasedYou’re eligible for a higher principal limitYou want access to more funds or a lower marginIn these situations, we often help homeowners refinance into better terms because the numbers genuinely improve.When refinancing usually doesn’t helpRight now, interest rates are higher than they were a few years ago. In that kind of market, refinancing usually works against you:Higher closing costsA higher starting loan balanceSimilar or worse interest ratesLittle or no extra funds availableYou’d be paying to refinance without gaining much in return.What you can do without switching lendersIf the main issue is watching interest add up, there are two simple ways to slow it down:Make voluntary payments toward interest or principal. Even small payments help reduce compounding.Reduce your monthly draws if you’re taking scheduled payments. Using less means less interest accrues.Both options let you control the balance without giving up the protections of the reverse mortgage.

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Funds available are $170,000, but the interest is killing me at $704 per month. Is there any way to curtail the rise of interest? I’m taking out $1,500 monthly, and the interest is $700...ouch!..... Can I switch to another reverse mortgage lender?