Regarding reverse mortgages, it's important to understand that you can have only one active reverse mortgage at a time. The amount you can access through this mortgage depends on several factors, including your age, the value of your property, current interest rates, and any necessary set-aside amounts.

You can consider refinancing your reverse mortgage after 12 months, but this is only advisable if the new loan offers significant advantages. Many borrowers find that their home's value hasn't increased sufficiently to make refinancing beneficial.

It's crucial to note that set-aside funds in your line of credit are still considered your money. Therefore, simply eliminating a set-aside doesn't qualify as a significant benefit under HUD's rules for refinancing.

HUD mandates that for a new reverse mortgage (specifically, a HECM to HECM refinance) to be permissible, it must provide the borrower with at least five times the cost of the loan in unique benefits. This means that if the new loan incurs $4,000 in costs, you should receive at least an additional $20,000 in unique benefits beyond what was available after releasing the set-aside funds.

There are exceptions to this rule, but lenders are generally only eager to pursue them if the new loan offers other significant advantages to the borrower. This cautious approach is because HUD can refuse to insure the loan if it deems that the lender did not adhere to the guidelines.

I hope this clarifies the intricacies of refinancing a reverse mortgage and the factors you need to consider in this decision.

Related: HECM-to-HECM Refinance ‘5-Times’ Benefit Rule Explained