Hi Charles,

The interest accrues on balance owed.  If you had a regular forward or standard loan with this outstanding balance, you would be paying that much and more in monthly payments to pay the interest and some of the principal to repay the loan over the term.  Instead, the interest accrues and then is added to the balance, which causes the balance to grow. 

While reverse mortgages never require payment, there is never a prepayment, and you can pay any amount at any time without penalty.  If you do not want the interest to grow, you can pay the interest that accrues monthly or in part.  If you pay any portion of the interest monthly, the amount owed will grow slower.

If you pay all the interest or all the interest and then some additional amount, then the balance would either remain stable or begin to shrink, just like a typical forward loan.  The real advantage here is that since there is no payment due, there is no payment due date, and you can make whatever payment you want whenever you want to make it.  If payment is not comfortable with making in any given month, there are no adverse effects because it was not required in the first place.

Refinancing into another reverse mortgage loan would only require additional costs to increase your balance.  Most borrowers will not benefit from a refinance if the goal is to lower the balance owed or retard the interest being accrued significantly since rates have increased recently, not decreased.  If you are serious about reducing the claim, I suggest you consider looking into possible monthly payments in some amount that is comfortable for you. 

You can always refinance into a standard loan, but then you must make the monthly payment on that loan month in and month out on that schedule.  You don’t have the option to skip months when prices are not comfortable, and if you run into several months in a row with income difficulties, you run the risk of lender actions for non-payment.