Hi Charles,

I understand your concern—watching interest grow on a reverse mortgage can be frustrating, especially when it feels like a significant portion of your funds is going toward interest each month. Here’s what you can do to reduce the impact of interest accumulation:

1. Make Voluntary Interest Payments

Reverse mortgages do not require payments, but you can make voluntary payments at any time without penalty.

• If you pay part or all of the monthly interest ($704 in your case), your balance will grow more slowly or even stay the same.
• Even partial payments will help reduce the compounding effect over time.

2. Reduce Your Monthly Draw

Since you’re taking out $1,500 per month, part of your loan balance growth comes from these withdrawals. If you reduce the amount you withdraw, less interest will accrue each month. If possible, consider adjusting your budget to rely less on the monthly draws.

3. Refinance Into Another Reverse Mortgage

Refinancing to another reverse mortgage lender might not help in the current market. Interest rates have increased, so refinancing could result in:

• Higher closing costs
• A higher overall loan balance
• A similar or worse interest rate

However, if rates decrease in the future or if your home has increased in value, refinancing may be worth exploring.

4. Consider a Standard Mortgage Refinance

You could refinance into a traditional mortgage, but this would mean:

• You must make fixed monthly payments.
• You lose the flexibility to skip payments if needed.
• If financial hardship occurs, you risk defaulting on the loan.

What’s the Best Option for You?

If your goal is to slow down the interest growth, the best approach is to:

• Make voluntary payments toward interest (even partial payments help).
• Reduce your monthly withdrawals if possible.
• Monitor interest rates in case a future refinance makes sense.