Refinance Your Reverse Mortgage: 2023 Limits & Lower Rates!

March 8, 2022 By Michael Branson 134 comments

Is a reverse mortgage refinance right for you?

There are many instances when borrowers consider a reverse mortgage refinance with a new reverse mortgage. Refinancing existing loans does make sense at times, and sometimes it does not.

Borrower(s) should only consider refinancing their loan when it makes sense for their individual circumstances. Some homeowners will find that they may meet some or all of the conditions listed below, but don’t need additional funds.

In those cases, a refinance is not warranted. For them, even though they qualify for additional funds, it might only mean that the borrowers would incur additional unnecessary costs.

When to consider a refinance of your reverse mortgage

Your home value has increased considerably.
You originally obtained your loan when the lending limit was less than the 2023 Home Equity Conversion Mortgage (HECM) limit of $1,089,300 and your value is at or higher than the HUD limit, especially the limit that was in effect at the time you closed your loan.
You are adding a younger spouse now who was not age 62 at the time you did the loan, and they were also not an eligible non-borrowing spouse to protect them from having to sell the home upon your death.
To benefit substantially from a lower interest rate or margin – This is a tough one and we will go into it further, most rate refinances alone are not beneficial.
Refinance into a larger proprietary or jumbo reverse mortgage plan.You find yourself in a position where you need additional funds at this time or believe you will in the near or foreseeable future.

Increase in 2023 lending limits or home values

If your home value increases considerably since you closed your original loan, there may be an opportunity to refinance to obtain more money.

Small increases will not typically bring a large enough net gain to borrowers to make a refinance worthwhile or viable as we will discuss later in refinance qualifications.

Homeowners who have homes that have values higher than the HUD limit at the time their loans were closed will usually benefit from a refinance at the new higher limits, but not always.

Prior to 2008, the HUD limit varied by county and the highest limit was $362,790. In 2008, the limit became a national limit, set at $417,000. In 2009, the limit was raised to $625,500 where it stayed for several years before it began to increase in 2015 as housing prices rose.

HUD HECM borrowers with higher valued homes who closed their loans before 2023’s current limit of $1,089,300 have a good chance to receive more cash benefits.

How refinancing can protect a non-borrowing spouse

Couples often removed a younger spouse from title prior to 2015 to close a reverse mortgage when one of the two spouses were not yet 62 years of age. The loans borrowers closed with younger borrowers prior to 2015 must be repaid when the older spouse passes or is no longer living in the property.

By refinancing these loans with today’s HUD guidelines, younger spouses would not have to refinance the loan or be forced to move when the older spouse passes if they do not have the means to refinance.

Even if that younger spouse is still under 62 years old, the couple can refinance the loan if they qualify under the current HUD program parameters using the “eligible non-borrowing spouse” designation.

As an eligible non-borrowing spouse, the younger spouse may remain on title and can also stay in the home for life under the terms of the existing loan without having to make a mortgage payment – even if the older spouse should predecease the younger spouse.

Borrowers looking to refinance with the sole motivation of a lower interest rate may be disappointed but for some borrowers with high exiting rates, mortgage insurance renewals and servicing fees, there may be a good opportunity at this time.

In addition to possibly receiving more cash, you may be able to get a lower rate, possibly a lower margin and maybe even eliminate a fee such as a servicing fee which lowers the interest that you accrue over time.

The loan must make sense. If the loan is not beneficial for you, instructs lenders not to complete the loan but there is more latitude regarding what constitutes “beneficial” when you are adding a previously ineligible spouse or drastically benefiting your circumstances.

Taking advantage of new types of reverse mortgages

The last point is that with the reintroduction of the jumbo or proprietary programs which offer loans to higher loan amounts are available once again.

Many borrowers accepted a lower loan amount on higher valued homes under the HUD program because it was the only program available for many years.

Those borrowers can now look at the jumbo products for higher property values to free up equity for other purposes and possibly refinance their lower HUD loans with the higher jumbo programs for higher valued properties (homes valued over the HUD limit of $1,089,300).

Reverse mortgage refinance eligibility

Both the HUD program and the private programs require you to have a significant equity position in your home to do a refinance of a reverse mortgage.

HUD generally requires borrowers to pass a “5-times benefit rule” to qualify to refinance a reverse mortgage with a new reverse mortgage. This rule exists for both HUD and for proprietary or jumbo loans. However, some exceptions may be made.

The rule is explained below, and it protects borrowers from equity stripping, which are constant refinances that do not benefit the borrower but accrue fees. To meet the test, you must receive at least 10% of the new principal limit in additional reverse mortgage proceeds for the HUD HECM to HECM refinance.

This would mean that if your Principal Limit is $300,000, you would have to receive at least $30,000 in new proceeds from the refinance loan in addition to the new proceeds being at least 5 times the costs of the loan.

Preferably your interest rate or margin should be improved, but in a rising interest rate market, this is not necessary. Exceptions may be made when the loan itself protects or significantly benefits the borrowers. Such a case would be adding a non-borrowing spouse protection to your loan.

Another example is when the new loan would drop the accrual rate by a large amount, saving the borrowers thousands in interest accrual within the next 5 years (and even more over a longer period). There is a 12-month minimum time between loans before you can apply refinance your current reverse mortgage with a new reverse mortgage.

Also See: HUD mortgagee letter regarding 5x benefit rule

Five times benefit rule

The five times benefit rule is in effect for both HUD and jumbo loans and is in addition to the 10% additional Principal Limit requirement that HUD imposes if you do not meet one of the exceptions.

To determine if a borrower meets HUD’s 5 times rule, you must take all the costs incurred to close the new loan and multiply those by 5. Then the borrower must receive at least this 5 times amount or more of money with the new loan.

If the new loan does not give the borrower at least 5 times the costs in additional cash (above and beyond any money still available to the borrower on the existing loan), the borrower does not meet the requirements and the lender will not grant the loan unless the borrower is adding a spouse who was not previously eligible or is significantly lowering their accrual rate.

A good way to illustrate this is that if all the costs for the new loan would total $10,000, then the borrower would have to net $50,000 more on the new loan (there is a formula that the lenders must follow per HUD guidelines which also accounts for servicing set-asides but for simplicity sake, this is a simplification of the policy).

Consider the new closing costs

The costs you must incur are all the same costs as when you got your first reverse mortgage (title, escrow, appraisal, origination fee, etc.) except for one big difference…the mortgage insurance calculations.

The mortgage insurance costs on a new reverse mortgage are much lower and in fact, unless your home value increases significantly, you may not even be required to pay any new upfront mortgage insurance.

With HUD’s Final Rule in September of 2017, they changed the calculation of the initial mortgage insurance premium for refinance transactions. It is a little complicated now, but the result is that borrowers pay less when refinancing their reverse mortgages with a new reverse mortgage.

Without going into the whole calculation, the lender will look at the value of your property when you took out your last loan and subtract it from your current value.

They will take that number and multiply it by .03 and if the answer is less than what you already paid on your last transaction; you will not be required to pay anything more on your first refinance.

There is a possible caveat to this for properties that have increased in value by more than $548,250 since the last reverse mortgage but we have not seen one that meets this yet so we will stick with the rule that applies to almost all borrowers.

MIP formula for HECM refinance transactions

For example, if you had a home worth $200,000 and did a reverse mortgage but want to refinance now and it is currently worth $300,000, the lender will multiply the difference of $100,000 by .03 which is $3,000. If you paid 2% Up Front or Initial Mortgage Insurance on your last loan, you paid $4,000.

Since $4,000 is greater than $3,000, you will owe nothing on the new transaction as long as it is your first refinance. If you have already refinanced the loan before, the amount owed for initial mortgage insurance would be based on what you paid on your last refinance, not the initial loan.

The same would be true for the Maximum Claim Amount or the value you are using. It would also be determined by the information at the time of the last loan, not the original loan.

The old refinance rules required most borrowers to pay something when they refinanced so you would be able to credit whatever you paid in the prior refinance against the $3,000 figure above but if you paid nothing, the most you would be required to pay would be $3,000.

Counseling requirements

You must complete the counseling again, even if you have already gone through the course in the past. You must complete your counseling before the reverse mortgage lender can order any services on your loan (appraisal, title, etc.).

Some states have even more requirements such as CA which imposes a cooling off period of 7 days after the counseling during which time the lender still cannot begin working on the loan.

Keep in mind that if you are going from a HUD HECM to a proprietary program, you must complete the counseling for that specific program.

Since private programs are a little different, lenders require that you attend a counseling course for that specific program to be sure you understand the new product.

HECM Reverse Mortgage Refinance Rates

Fixed Rate	Adjustable Rate	Lending Limit
4.81% (5.81% APR)	3.52% (1.75 Margin)	$970,800
4.93% (5.93% APR)	3.77% (2.00 Margin)	$970,800
4.99% (5.99% APR)	4.02% (2.25 Margin)	$970,800
5.06% (6.06% APR)	4.27% (2.50 Margin)	$970,800
5.18% (6.18% APR)	4.52% (2.75 Margin)	$970,800

Fixed Rate Payment Options: Lump Sum
Adjustable Rate Payment Options: Lump Sum, Line of Credit, Term, Tenure, Combination.
APR Illustration: 4.99% + .50% Monthly MIP = 5.49% in total interest charges. Assumes $250,000 loan amount and includes .50% Mortgage Insurance, standard 3rd party closing costs.

Jumbo Reverse Mortgage Refinance Rates

Fixed Rate	Adjustable Rate	Lending Limit
5.49% (5.625% APR)	6.645% (4.875 Margin)	$4,000,000
5.75% (5.875% APR)	6.76% (4.99 Margin)	$4,000,000
5.99% (6.00% APR)	6.89% (5.124 Margin)	$4,000,000
6.50% (6.625% APR)	6.89% (5.250 Margin)	$4,000,000

Fixed Rate Payment Options: Lump Sum
Jumbo APR Illustration: Assumes $1,000,000 loan amount, includes standard 3rd party closing costs.

Adjustable Rate Payment Options: Lump Sum, Line of Credit, Term.
Index: 3-Mo. Libor
Lifetime Cap: 3% Over Start Rate

Refinance FAQs

Can you refinance if you have a reverse mortgage?

Yes. The guidelines on a reverse mortgage do permit refinancing of the loan to a new reverse mortgage loan as long as the new loan provides a tangible benefit to the borrower. A tangible benefit is determined by the amount of new proceeds available or the adding of a new spouse. There are two tests that must be passed in order to deem the refinance beneficial and those are known as the proceeds test and the closing cost test (commonly referred to 5-1). The proceeds test is straight forward and requires that the new loan provide proceeds in the amount of 5% of the new Principal Limit. The closing cost test or 5-1 test requires that the new Principal Limit be at least 5 times the amount of closing costs higher than the current loan Principal Limit.

What are the HECM to HECM refinance guidelines?

To qualify for a HECM refinance you must have your existing reverse mortgage seasoned for 12 months. Additionally, the new reverse mortgage would need to pass both benefit tests (Proceeds & Closing Costs) or provide the benefit of adding a new spouse to the loan.

What are the closing costs or fees for a reverse mortgage refinance?

The reverse mortgage refinance costs are usually much less than your initial loan because you get an MIP (Mortgage Insurance Premium) credit for the amount you paid on the previous loan. The remainder of the standard closing costs for Appraisal, Title, Settlement, Recording, Etc. will vary depending on your location and current rates for those services at that time.

Can you refinance a reverse mortgage into a conventional loan?

Yes. You can refinance out of a reverse mortgage into any type of conventional or traditional mortgage, HELOC etc. Reverse mortgages have no prepayment penalties and provide a monthly statement which always outlines your current outstanding loan balance. When you apply for a new mortgage, the lender will submit a demand for payoff like any other refinance process.

Can you take out a second reverse mortgage?

No. While reverse mortgages do allow for subordinate financing, you will not likely find a lending institution interested in lending a second behind a reverse mortgage due to its negative amortizing nature. If you are looking to take additional cash out from your home’s equity and already have a reverse mortgage, your best bet is to either look at refinancing the reverse mortgage itself into a larger HECM loan or refinancing into a traditional mortgage.

What is the difference between a refinance and a reverse mortgage?

A traditional refinance is when a borrower refinances a “forward mortgage” into another mortgage to benefit from a lower interest rate or take cash out for home improvement, debt consolidation etc. A reverse mortgage is an entirely different program which serves seniors aged 62 and older offering the ability to eliminate the mortgage payment altogether for the borrower’s expected lifetime.

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About the Author, Michael G. Branson | Mike@allreverse.com

Michael G. Branson CEO, All Reverse Mortgage, Inc. and moderator of ARLO™ has 40 years of experience in the mortgage banking industry. He has devoted the past 18 years to reverse mortgages exclusively.

134 Comments on this Article

Lisa P.
December 5th, 2022

Hi Arlo

I have had a reverse mortgage since 2012. The property was appraised at $120,000. It is now appraised at $400,000. How do I know if the $120,000 loan is paid, and does the appreciation have any benefit if I request additional funds for living expenses? I'm 81 years old.
Reply to Lisa
- ARLO™
  December 5th, 2022
  
  Hi Lisa,
  The loan is not repaid until you pay it off. That would happen if you paid money out of your pocket to pay off the balance, sell the home and the loan is paid with the sale proceeds or if you refinance your loan and it is paid with the new mortgage loan. If you had remaining money in your line of credit, the line has grown on the unused portion over the years. The amount of growth depends on how much was left available on the line and interest rates.
  If you got a line of credit with your last loan and the remaining money on your current loan will not meet your needs, you may be able to refinance your loan to receive more money. If your last loan was a fixed rate loan it was a full draw, and you have no more funds available on that loan.
  Rates are higher than they were the last time you got a loan but the Mortgage Insurance Renewal Premium (MIP) should be lower now so they may not be a big difference. Either way, you can check our refi calculator to see what you might be able to receive.
  Reply to ARLO
William
August 7th, 2022

Arlo, My 93 year old father-in-law recently refinanced his HECM loan. Technically he met the HUD requirements to qualify for refinance. His increase in the borrowing limit was $25,000. What he didn't realize was that the lender added a set aside (against his borrowing limit) of $37,000 to pay future taxes and homeowner insurance. So, the actual amount he can access has decreased by $12,000. Not to mention a cost of over $4000 to get this "increase" in the borrowing limit. Can this be undone?
Reply to William
- ARLO™
  August 20th, 2022
  
  Hello William,
  
  If you had not closed the new loan yet, you could certainly cancel at any time before the new loan closed and recorded. The lender is required to disclose the final figures multiple times as well as at documents with a right to rescind if the borrower does not like the terms. Once the loan has closed though and the old loan is paid off and a new loan is recorded against the property, I am not aware of any way to put the old loan back on the property at that point. I once heard it described as "unflushing a toilet", it can't be done because once the old loan is gone, it's gone. But you do still have options and possibly benefits you may not yet be considering.
  
  You can always pay the loan off. You could do so with another loan program or with other funds if the family wanted to fund a private reverse mortgage for the owner. This may not be something that the family is prepared to do or even able to do but there is no prepayment penalty, and it is an option. Another thing that you may want to consider is whether the LESA (the set aside to pay taxes and insurance) is really an actual benefit for him. He may not have access to those funds, but now he will not need to pay taxes or insurance for as long as he lives in the home. I do not know the reason he was required to get the LESA, but it is possible he was having a hard time paying the taxes and/or the insurance or paying them on time. Failure to pay taxes and insurance in a timely manner is a default on reverse mortgages and if that was an issue, he might have found himself in default at some point without the LESA.
  
  There are also other benefits do the LESA account. Your father-in-law no longer has to pay the taxes and insurance on the property and so that money has been freed up for him to use on other expenses. It is set aside so it is not considered borrowed until the lender sends it to the tax assessor or the insurance company to pay the charge and therefore, it accrues no interest until it is used to make a payment on his behalf. And should your father-in-law move or otherwise decide to repay the loan before all the set aside funds have been used, that money was never used and therefore, not lonely did it accrue no interest, but it does not need to be paid back. You said that the set aside was for $37,000 and that money will only need to be repaid if your father-in-law uses the funds to pay taxes or insurance while living in the home and if that happens, then it will be $37,000 he will not be required to pull out of his pocket to pay at that time.
  
  I do realize that this may not be the answer or resolution that you were hoping for and I think that if the company who closed the loan for your father in law did not go way above and beyond to explain this all to your father in law at the time, before they closed the loan, they did do him a disservice but the set aside in and of itself is not necessarily a terrible thing. Yes, he has $12,000 less available now than he did before but depending on how much his annual taxes and insurance are that might even out in a relatively short time, he no longer must be concerned with setting funds aside to pay taxes or insurance and if he was getting behind on his taxes and/or insurance, it may have also saved him from a future default that could have been much worse.
  Reply to ARLO
Gay S.
April 19th, 2022

If I'm only person on reverse mortgage and someone else lives in the house, can I still refinance my reverse mortgage without any documents from the person who lives in the house with me?
Reply to Gay
- ARLO™
  April 19th, 2022
  
  Hello Gay,
  
  If the person living with you is not a spouse or has any interest in the property (they are not listed as an owner on title), they would not be required to supply any documents for your loan on your house.
  This would include other family members or someone renting a room from you, etc.
  Reply to ARLO
Jodi
February 18th, 2022

I am thinking of refinancing my reverse mortgage. My interest rate is 5.06% and my MIP rate is 1.25 on my existing reverse mortgage. My homes values is $300,000 to $325,000 and my current loan balance is $199,000. I was given a rate of 2.6 for an adjustable rate and 3.56 for the fixed rate and MIP of .5. Is the adjustable-rate worth thinking about? I lived through the 80's and had 16% on the first home I purchased so am very fearful of those type of interest rates. But, does that even matter? I am planning on living my life out here in this house and have no dependents to leave my home to? What are your thoughts on this scenario?
Reply to Jodi
- ARLO™
  February 22nd, 2022
  
  Hello Jodi,
  
  Depending on your age, a refinance may not even be possible at this time. I would strongly suggest that you send us a copy of your most recent statement, include your age and let us let you know if a refinance is even possible and what options would be available if so.
  
  With regard to your query about is it advisable, I can tell you that people who have had the adjustable-rate reverse mortgage loans have done tremendously better than those who thought they were going the safe route and took 5% and higher fixed rates over the last 15 or so years.
  Unfortunately, who can say what the future will bring? Even after 45 years of mortgage banking experience, the only thing I can tell you for sure is that the rates will either go up, go down or stay the same (or may do some or any of all of the above) in the future.
  
  The only thing you can do is look at the complete picture available to you at the time and make your best decision based on the facts available to you. You could definitely lower the accrual rate now as well as trim the MIP accrual by .75% at this time with a refinance and that might be worth the refinancing the loan but there will also be a cost to do that.
  Compare the amortization schedule of the new loan to your existing schedule (hopefully you still have it) and see where you will be with each loan in the next 3, 5 and 10 years and make the best decision you can with that information. If there is more money available to you know that would be beneficial, that might also come into your consideration.
  Reply to ARLO
Marla
December 19th, 2021

Hello Arlo,

My dad received $500,000 lump from a reverse mortgage at 5.76% He now regrets it as he didn't need the full $500,000 and he has it in his bank account. He had planned to do something with the full amount but decided against it.

He can pay $200,000 toward the $500,000 owed, and wanted to refinance his home in a conventional loan for the remainder ($300,000 plus all the interest he owes). He can afford the monthly mortgage payment.

He's 84 years old, can he get a conventional mortgage?

What would be a better course of action for him? What type of professional can I ask run numbers, factor in fees and interest to help evaluate what is best, stay in it or refinance? (but who are impartial)

Also his home was appraised at $1,300,000 for the reverse mortgage 2 years ago. But this was about $300,000 too high. Homes larger, remodeled, with better views, larger lots and within 5 blocks of his home sell for around $1,400,000 to $1,600,000. But his home is small, dated, on a small lot, no view and these seem to sell for $1,000,000. Why would the reverse mortgage over-value his home? Do they need to meet some sort of ratio?
Reply to Marla
- ARLO™
  December 19th, 2021
  
  Hello Marla,
  
  Let's talk about the appraisal process first. Under appraisal independence laws, the originator cannot even choose the appraiser nor can they suggest a value. Most of the time, borrowers accuse lenders of "low-balling" their values and the lender have no control over the process either way. A licensed, independent appraiser determined the value on their own based on the sales information he/she had available to them at the time.
  
  With regard to the refinance, your dad can pay off the loan with cash or a refinance at any time without penalty. Since he is getting a lower loan amount, he could also look into a HUD HECM reverse mortgage at much lower interest rates and take a line of credit that he could use just the amount needed to pay off the existing balance and leave the remaining on the line unused on which he does not accrue interest.
  This would mean he has funds available to him if he needs them later if he needed them or he could choose to never use them, it would be his choice. And if he wanted to, he can make a payment of any amount at any time on that loan as well to repay the balance or to keep the balance from rising but he would not be required to so if he was ever in a position where making a payment was not possible or comfortable, it would not adversely affect him.
  
  And of course, he can always approach any forward lender (at 84 he can still get any loan he chooses as long as he qualifies for the financing) for a standard refinance loan. The upside for such a transaction is that the fees are typically lower but then the qualification is tougher and he has regular payments that he must make or he risks credit and other implications if the payment is ever missed or late. As far as who he should speak with, there are literally hundreds of forward or traditional lenders and you can check with his bank or credit union (if he belongs to one) or do a quick internet search to find one that offers a program that is right for him if that is the way you choose to proceed.
  
  As far as which is better for him, only you folks can make that determination. Take a look at both options and see which better suits his needs and abilities. If the forward loan puts any pressure on his finances or his cash flow, I would strongly suggest that you consider the HUD HECM reverse mortgage line of credit option. If he has more than adequate income and there is no problem and you do not feel there ever would be with his cash flow paying on a forward loan, you may want to consider that loan.
  Before you discount the reverse mortgage though, I would also recommend that you check to see what lender credit options are available to help pay the costs as you may be able to bring those down substantially.
  Reply to ARLO
  - Ruth
    May 2nd, 2022
    
    Hi ARLO,
    
    Our house appraisal has increased, pay off on existing loan about $150,800, county appraisal at $370,000. Would this be beneficial to refinance?
    Reply to Ruth
    - ARLO™
      May 10th, 2022
      
      Hi Ruth,
      
      It is beneficial if it makes sense for you. For some people it doesn't make sense and they don't want or need the money.
      For some people, the costs to refinance the loan won't make sense once you determine the amount of money they receive on the refinance. For others, it makes all the sense in the world because their existing loan has less favorable terms and the new loan also gives them more money that they really could use.
      So, it really depends on you and your circumstances. I would never advocate for a loan just for the sake of getting a loan. But if it makes sense for you, it is available.
      Reply to ARLO
Dianna R.
August 31st, 2021

Hi ARLO, We did a reverse mortgage in 2017, Our appraisal on house was $625,000. We got a line of credit of 53,000. Over the first 2 years, we took money in the amount of $32,000. to remove roofs on house & put a new roof on, plus a new garage roof. We had a new covered patio built-in back of the house. New water heater, new 7' white Vinyl fence, all new wood floors throughout the house, new water heater & padding & carpeting in 3 bedrooms, the whole house outside was painted, all new screens, New Fascia boards, did some landscaping. and we live on a canyon lot. In February 2021 we did a refinance and they did a drive by appraisal, took a picture of the front of house and appraised it at $645,000. In our area code of 92123 in California, the homes are selling for in the mid $700,000. I had a couple of real estate people come here, one that lives 3 blocks away and every one of the said canyon lots house in this area with no updates (as house were built in 1958) are selling between $739,000. no updates and with the things you did in the last 3 years, plus have RV parking, and the 2nd largest lot on the block we could park 15+ cars in our back yard. that's how big it is, and it got the biggest view as our property we own park of Ruffin Canyon down to the first trail, with an 80 ft Torrey Pine in canyon between the 8' chain link fence with gate. 1246 sq. foot house. we only got $3,000 line of credit. The Lender said we would get 24,000 line of Credit but she estimated the appraisal at $675,000. The drive by appraised it at $645,000. Is there a way we can get money from equity in house, as we owe $352,000 to take out 2 closets in living room and a small wall taken and enclosed our Patio? Any suggestions? Thanks Dianna
Reply to Dianna
- ARLO™
  September 9th, 2021
  
  Hello Dianna,
  
  If you did not close that loan, you can always apply again now. The drive by appraisals are no longer available and the current appraisal would consider your home's current condition as well as all the current sales in the neighborhood.
  If there are sales to support mid-$700,000's, that would be the value the new loan would be considered using and the appraisal in February would not even be considered any longer. An appraisal is only valid for 120 days and then it is expired.
  If you did close that loan. You would need to wait a little longer to have the loan refinanced again and it may not work as well for you a second time since HUD now does not credit your initial mortgage insurance premium paid on the first loan on subsequent refinances.
  Therefore, it is a good reason for borrowers to be sure of their timing for a refinance and not jump into a refinance prematurely before the new loan is a clear benefit to their circumstances. Before you do anything (even if you did not complete the refinance in February), it is always wise to check closed sales to be sure that there are recent sales of similar homes that have closed in the last 6 months that will support your needed value.
  Real estate agents are usually very positive and tend to consider what they believe a home would sell for and not necessarily what the appraised value is liable to indicate based on the analysis of closed sales of similar properties.
  They may very well be correct in what they believe the home could sell for, but an appraiser must estimate a value and support it based on actual closed sales and if there are no closed sales to support their opinion of value, HUD will not allow an appraiser to use lower sales and then adjust upward for what he/she believes would happen if the closed data does not support that conclusion.
  Reply to ARLO
Debbie C.
August 24th, 2021

I have a reverse mortgage from 2017 with a balance of $290K. The current value of my home is $680K-$730K Is it wise to refinance the mortgage? I don't need any money from it, but I'd like to get the MIP lowered. Any suggestions?
Reply to Debbie
- ARLO™
  August 24th, 2021
  
  Hello Debbie,
  
  To refinance or not is a decision that everyone must make based on their own circumstances. Needing more money now is often not the only reason to consider a refinance and I would love to point out some of the things you may want to consider.
  
  Firstly, all HUD/FHA reverse mortgage loans will have mortgage insurance so refinancing will not change that fact. You will not lower the MIP so if that is your sole motivation, I would tell you not to consider it. However, you may be able to do more positive things and not raise the MIP cost at all which might save you money in the long run as well.
  For example, you do not need to pay the Up-Front MIP cost you already paid so if your home has increased in value, there is a good chance you can get a lender credit so that the lender will pay the increased MIP on your behalf.
  You do not accrue interest on any funds you do not borrow, but if you have additional funds available because of a refinance, those funds in the line of credit will grow on the unused portion that will give you greater access to funds later if you do need them. If you never borrow them, they do not accrue interest so there was no additional interest cost.
  
  Next, I do not know what your interest rate on your current loan is but you may be able to improve your overall interest situation for your rate and margin. I believe your loan was already originated when the MIP renewal had been lowered back to 1.25% so there would be no difference from today's renewal rate of .50% from the .50% renewal rate you probably have now.
  I would encourage people to look at their statements or their loan documents though and if they have the higher 1.25% renewal rate, then it might really benefit them to refinance to take advantage of to lower MIP renewal. That is saving .75% if you have the higher renewal MIP and on a balance like yours, that would be about $2,175 in the first year alone and as the balance increases and over many years, that would be a substantial savings.
  
  Finally, be sure to shop around. You may be able to find a lender willing to offer to pay some or all of your costs on a refinance transaction that make the loan extremely affordable or would add very little if anything to your existing balance. It doesn't hurt to find out and you may not need the money now, but it might be nice to have it available in case of any unforeseen circumstances later (especially if the availability of additional funds saves you money to procure).
  If you would like to see what you might be able to have added to your line of credit, you can get a no-cost and no obligation proposal at our HECM refinance calculator to see if the numbers work for you.
  Reply to ARLO
Carol S.
July 24th, 2021

I have a reverse mortgage (18 months old) and want to refinance. I was told that I can't since my son lives with me. Is this true? I know he can live with me now, but to qualify for new loan he cannot be a resident.
Reply to Carol
- ARLO™
  July 24th, 2021
  
  Hello Carol,
  
  That is not factual, and I would encourage you to speak to a lender about your circumstances. I don't know if perhaps your qualifications are so tight that an additional member of the household that you must support means that you do not qualify under the HUD residual income method for a 2-family household but if your son is working and has enough income to support himself, that would not be an issue.
  Also, if your income is sufficient to qualify under a 2-person household, that still is not an issue. If the problem is that your income will not support the HUD requirements for 2 persons in the family, that's a whole different issue but there is no prohibition about having your son live in the home.
  Reply to ARLO
Shirley M.
July 19th, 2021

I keep getting refinance letters. I'm with novad and owe $310,000 and house might sell for $335,000. Why would they think refinancing is a good idea?
Reply to Shirley
- ARLO™
  July 19th, 2021
  
  Hello Shirley,
  
  When advertisers determine to whom they are going to send their mailers, they determine the best way to spend their advertising dollars by trying to select the best recipients of their mailers.
  Some go to great lengths to determine ages, property values, loan balances on existing loans, etc. while others just look at the type of loan on the property and the date the other loan was closed and send out their mailers accordingly.
  If your loan is being serviced with NOVAD, it is probably an older loan and therefore, the loan could be underwater, but it could also be a very low loan to value if your property has increased in value and/or your loan was originated at a time when HUD had lower maximum lending limits in your area (or a combination of both).
  Lenders who live off refinance of existing loans, whether it be on forward or the reverse loans, will often flood the market with flyers in the hopes that enough of them reach borrowers who are willing and able to refinance that it makes their costs worthwhile.
  They don't know how much you owe when they send the mailers out, they are just blanketing an area and hoping. Since you are aware of your circumstances, you can just toss them into a trash can when you receive them and not think twice about it.
  Reply to ARLO
Rose
May 24th, 2021

Hi Arlo, We are 67 older in September, and 78 older in August. We are considering to refinance our current reverse mortgage originated in 2018 at no cost except for the counseling. We are currently on a fixed rate of 3.99% for life with a loan balance of $372,945.92 and valued $1,090,000 under the HUD old limit of 850K. Currently we don't need extra money. Do you think switching from fixed rate to adjustable would be a good option for us? Our offer for fixed is 3.06% and a lender's margin of 1.625% with 5% cap. Appreciate your advice.
Reply to Rose
- ARLO™
  May 24th, 2021
  
  Hi Rose,
  
  There are a couple of reasons when it would make sense to refinance. One is for access to greater funds that are needed or possibly needed in the future and two is for a better rate/financing scenario.
  No one can ever predict what rates will do in the future and if you are asking will an adjustable-rate loan increase in rate in the future I would have to guess that yes, rates will rise at some point, but the question is when and by how much. They have been down for so long that most reverse mortgage borrowers today have done very well with the adjustable-rate loans and eventually it is not unreasonable to expect them to go up.
  If you are only looking to refinance for a lower adjustable rate at this time and that rate is not much below the fixed, I would not advise it. However, if you can also opt for a 3.06% fixed rate at no cost and save nearly 1% per year, that might be a very good option for you.
  If you take out additional cash with the fixed rate option that you do not want or need because it is a full draw only option, you can make a principal reduction payment later if you wish. The good thing about the adjustable-rate line of credit is that you are not required to take a draw if you do not want the money now.
  
  If your motivation is not so much just the rate reduction but also the availability of additional cash in the line of credit that you may not need now but will have available to you if you do need it later, then a no cost refinance now on the line of credit might be a good option for you with the adjustable-rate program. But only you can decide if the possibility of a rate increase on the adjustable rate is less important to you than the availability of future funds and therefore the line of credit makes more sense.
  The general feeling is that we are heading into inflation and that rates will rise but no one really knows when or how much so only you can decide if having the additional funds or the lower interest rate is more important to achieving your goals. I wish I could tell you what rates will do and if they do go up, when and by how much but after 45 years in the mortgage banking industry, the only thing I can tell you for sure is that they will go up, or go down, or stay the same!
  My crystal ball broke years ago and I would never try to tell you that I can time the market with rate changes because so many things can happen that affect the global market and interest rates. You need to make the best decision possible for your circumstances based on the information currently available. I really wish I had more definitive guidance for you on that but that is the best, most honest information I can give you.
  Reply to ARLO
Alicia
May 10th, 2021

I just refinanced my house through my credit Union, can I do a reverse mortgage after 18 months?
Reply to Alicia
- ARLO™
  May 10th, 2021
  
  Hello Alicia,
  
  If you did not take any cash out on that transaction, you can refinance now. If you did take cash out with that loan, then you must wait 12 months to be eligible to pay that loan off with the reverse mortgage, not 18.
  Reply to ARLO
Aletta
March 4th, 2021

Hi ARLO, I'd like to refinance out of my reverse mortgage into a forward and add my daughter. Can I do a streamline refi? It will be a rate and term. It would be nice to avoid all that traditional fees such as an appraisal. My thoughts are no, because I would be going from no payment, to now having one again so I'm guessing they'll want to qualify my income. Thank you in advance for the answer.
Reply to Aletta
- ARLO™
  March 4th, 2021
  
  Hello Aletta,
  
  I do not believe there is a streamline program that would do the loan for you, they are typically available to borrowers who are refinancing from a loan to a new loan of the same type and not extracting any cash from the property.
  However, there are plenty of loans available in this interest rate environment where some or all the costs can be absorbed by the lender with a slightly higher rate. I would suggest you shop around a bit and find the best deal for your circumstances. You are probably correct.
  Most loan programs must follow "ability to repay" rules that will require the lender to verify that you can make the loan payments and that means underwriting for qualification of income and credit. There is no prepayment penalty on the payoff of the reverse mortgage so that is a good thing.
  Reply to ARLO
Gwendolyn L.
November 17th, 2020

Hi ARLO,
I am doing a refi on my reverse mortgage. I pay 1.25% for my MIP NOW AND 4.99% interest rate. Is it worth a refi with today's rates? I am told my MIP would be .05%.
Reply to Gwendolyn
- ARLO™
  November 17th, 2020
  
  Hello Gwendolyn,
  
  With today's rates and with any possible increase in value in the home, it could be that you are eligible for additional funds on the loan and could save thousands of dollars in interest accrual over the life of the loan.
  I would encourage you to visit our online calculator to compare the numbers for yourself to see how the refinance would affect your interest accrual.
  Reply to ARLO
Dave
November 2nd, 2020

Can I refinance now at a lower rate at the age of 60, and still be eligible to do a reverse mortgage when I turn 62?
Reply to Dave
- ARLO™
  November 2nd, 2020
  
  Hi Dave,
  
  Yes, you can refinance now and even take case out if that is your desire and it will not affect your ability to get the reverse mortgage two years later -as far as the rules are concerned.
  HUD requires a 12-month seasoning to pay off loans used for cash out with a reverse mortgage so as long as the loan is seasoned over 12 months, you would be fine in that regard.
  The one thing I would caution you about is that you want to be sure you do not borrow so much that it might make getting the reverse mortgage harder considering the maximum percentage for a 62 year old borrower at the lowest rate is currently just under 53% of the property value.
  This percentage is not fixed and can increase if HUD changes the programs parameters but is most likely to decrease in the next two years if interest rates rise during that time.
  Reply to ARLO
Coni M.
October 29th, 2020

I would like to refinance my reverse mortgage. I do have a penalty for being a few days late paying my property taxes, can I still get a refinance?
Reply to Coni
- ARLO™
  October 29th, 2020
  
  Hello Coni,
  
  HUD is particularly concerned about late property charges in the past 24 months. I hesitate to answer about the late payment of taxes when you say that the penalty was paid for a "few days late" when most takes are due and the penalty is not payable for quite some time after.
  The remedy that HUD prescribes for late property charges is a LESA -a Life Expectancy Set Aside where are funds are set aside from the loan to pay future installments of taxes and insurance.
  If your refinance would work with a LESA, chances are good that it would not be an issue anyway.
  If you would not be able to close with funds set aside, you may want to have a lender review your credit and the tax and insurance payment history before you proceed to be sure it meets HUD's requirements for loans without the necessity of a LESA.
  Reply to ARLO
SANDRA L.
September 24th, 2020

My grandmother wants to add me to her title and the house has a reverse mortgage. She wants us to refinance and pay off the reverse. If I go on title will the lender start foreclosure?
Reply to SANDRA
- ARLO™
  September 24th, 2020
  
  Hello Sandra,
  
  Your grandmother can add anyone to title she wishes and there is no problem with the loan if she is still also on title.
  In other words, her loan documents specifically state that if she still lives in the home as her primary residence, she can add others to title if she also remains on the title with them.
  Your grandmother can add you to title and then you folks can do whatever you want with regard to financing, selling, etc. without fear of the lender calling the reverse mortgage due before you can complete your transaction.
  Reply to ARLO
Ann D.
September 24th, 2020

Is there an income or residual income requirement to refinance my reverse mortgage?
Reply to Ann
- ARLO™
  September 24th, 2020
  
  Hello Ann,
  
  HUD has used the residual income method of qualifying borrowers since 2014 when they instituted financial assessment guidelines for the program.
  What this means is that borrowers must meet certain requirements based on family size after all debts and property charges are paid.
  The qualification is not restrictive, it allows borrowers to use the dissipation of assets and even the loan itself to help qualify.
  HUD just does not want borrowers to still be unable to live in the home comfortably even after the loan has closed.
  If you cannot meet the residual income requirements, even with the optional Life Expectancy Set Aside to pay taxes and insurance, HUD feels that you are better off to face that eventuality now while you have all your equity rather than in a few years when you have less equity and then you must move anyway.
  It is not an easy thought, but better to address it while you are in a stronger equity position.
  
  We are more than happy to go over your income and expenses including your property charges (taxes, insurance any other charges such as HOA dues if any) and let you know if you qualify under the HUD method.
  We can also suggest other alternatives HUD will allow.
  As I said, there are often other ways to meet the residual income requirements and we would be happy to review your circumstances with you if you would like.
  Reply to ARLO
Archer
September 20th, 2020

Will I have to complete all the paperwork I did when I got my first reverse mortgage if I am just refinancing it?
Reply to Archer
- ARLO™
  September 20th, 2020
  
  Hello,
  
  This is a totally new loan. You must complete all the same documentation and in fact, there may be more required of you now depending on when you received your first loan.
  If your first loan was originated prior to the move to financial assessment guidelines when HUD began reviewing income and credit of reverse mortgage borrowers, you may not have had to supply income or verification of payment history on your last loan. Unfortunately, though, HUD does require it on every loan.
  Reply to ARLO
Brian
July 24th, 2020

On a reverse mortgage reverse refinance do I still pay fees and costs?
Reply to Brian
- ARLO™
  July 24th, 2020
  
  Hello Brian,
  
  There are always some fees associated with closing a loan. Title, escrow, appraisal, etc.
  You would not be required to pay the portion of the MIP initial premium on a refinance that you already paid on your first reverse loan the first time you refinance it.
  However the difference between what you paid on the first loan and what would be due on the second loan, if any, would be added to the costs (this would be the case if the value increased as the MIP is determined by the value of the home).
  In many instances, lenders can give you a credit for some or all the fees but that is dependent on the market at the time. The costs are still there, but the lender may be able to pay some of them on your behalf.
  Reply to ARLO
Bill B.
July 17th, 2020

I have an existing reverse. My new principal limit has increased but I don't know what the property would appraise for. Does the new principal limit minus what I owe on my loan determine the amount of new funds available to me on a refi or does the new appraised value minus what I owe determine the new funds?
Reply to Bill
- ARLO™
  July 17th, 2020
  
  Hello Bill,
  
  The amount available to you would be determined by the new appraised value using the current HUD calculator for your age, the current maximum lending limit and interest rates.
  If your property has increased in value, especially if it was valued higher than the HUD maximum limit at the time you obtained your last loan, you may be eligible for an increase in funds in this current low interest rate environment.
  Because HECM to HECM refi's can be a bit tricky and you need to be sure that you include sufficient interest on the old loan to cover processing and payoff plus any remaining funds available in the tests to determine eligibility, etc., we do not include this loan type on our calculator on the website but would be more than happy to run the numbers for you on either a call or an email with the birthrate of the youngest borrower a copy of your most recent statement.
  Reply to ARLO
Steven J.
July 12th, 2020

If I refinance my reverse mortgage will my $20,000 back property taxes be paid off?
Reply to Steven
- ARLO™
  July 12th, 2020
  
  Hello Steven,
  Any back taxes would be required to be paid to refinance the loan. Also, under HUD's current parameters, you would be required to set up a set aside account to pay the taxes and insurance in the future. A Life Expectancy Set Aside (LESA) would require that you have sufficient funds available in the refi to pay off your current loan and fund the LESA.
  I would encourage you to investigate this as soon as possible because if it is not an option, you need to realize that one of the requirements of your existing loan is to pay your taxes and insurance when due. If your taxes are currently delinquent, you are in default now and run the risk of having the loan called due and payable.
  If a refinance is not an option and you cannot pay the taxes that are due, you may need to consider other alternatives which could include selling the property and downsizing to one with more manageable expenses before that is no longer your decision as would be the case if the loan was called due and payable.
  Reply to ARLO
Kandy
June 29th, 2020

My parents are refinancing their reverse mortgage, why would the mortgage company want them to do a power of attorney?
Reply to Kandy
- ARLO™
  June 29th, 2020
  
  Hello Kandy,
  There is no reason for a lender to "want" a borrower to execute a Power of Attorney (POA). In fact, the HUD rules for accepting and using a POA are strict and from a lender's perspective, it is easier to originate a loan that does not require its use.
  Having said that, there may be specific reasons in this instance of which I am not aware, that I cannot consider and on which I cannot comment.
  Typically, though when using a POA it is only after the POA was completed at a previous date when the borrowers both had full competency and the borrower(s) require assistance to close the loan now.
  If both borrowers are fully capable now and could execute the POA, they could also execute the loan application and the loan documents and therefore a POA would not be required.
  If one of the borrowers now lacks competency, it is also too late to grant POA and so I cannot comment on why this is arising in your parents' transaction. Have you asked them?
  Reply to ARLO
Glenn P.
June 15th, 2020

On my current reverse mortgage, I currently at 81% LTV. Can I refinance the loan to add my wife? She was under the allowable age when I took out the reverse mortgage 6 or 7 years ago.
Reply to Glenn
- ARLO™
  June 15th, 2020
  
  Hello Glen,
  
  If you are at 81% of the current value, you would not have sufficient equity to complete a refinance of the existing reverse mortgage.
  However, if you are at 81% of what the home was valued at that time, the property's value may have risen enough to support the refinance and only a new appraisal would tell for sure.
  But we can pull recent sales in your area long before you pay for an appraisal and let you know if the sales support a value that would allow you to refinance at this time. I would suggest that you contact us at 800-565-1722 or request this quote using our HECM Refinance Calculator.
  Be sure you have your latest reverse mortgage statement as we will need some information off that statement to be able to determine your eligibility. Give it a try. There is no obligation and no cost to find out.
  Reply to ARLO
Nan S.
May 4th, 2020

Can I add a 70 years old sibling to my reverse mortgage without refinancing it? I am disabled from a stroke and she is my caregiver.
Reply to Nan
- ARLO™
  May 4th, 2020
  
  Hello Nan,
  
  Once a reverse mortgage loan has been closed, you cannot add another borrower to the existing loan.
  You can add her to title so that the property would pass to her if anything happens to you if you wish, but the loan would be due at that time and she would need to refinance the loan then or sell the home.
  If you do decide to add her to title, I would also suggest that you send written authorization to your lender now authorizing her to speak to them and them to her on all matters relating to the loan.
  Without your authorization, they would not be able to talk to her about the loan until she had legal right to do so under the financial privacy laws.
  Reply to ARLO
Paul S.
March 30th, 2020

Hello Arlo - I am trying to help a close friend who is wondering if an existing reverse mortgage can be refinanced to increase cash flow to her elderly parents. My friend is the successor trustee of her parent's trust. Her parents own their home (in their trust) which is worth $1.6 million and has a reverse mortgage in place with a balance of about $500,000. My friend's mother has Alzheimer's and her father health is declining such that he is no longer competent to sign new loan docs. The question: can a successor trustee initiate a refinance in this situation, and would such a refinance generate additional resources to help care for her parents, who want to remain in their home? Thank you!
Reply to Paul
- ARLO™
  March 30th, 2020
  
  Hello Paul,
  
  They sound like they would be candidates for the new Jumbo products that are available. The loan that they probably have now is the HUD HECM loan that limited homeowners to the HUD maximum loan amount whereas the jumbo or proprietary programs will accommodate much higher valued homes.
  
  The question of whether someone else can sign for dad would depend on how their legal documents are written prior to dad's incapacitation and if there is a power of attorney (POA) that authorizes mom or the daughter to act on dad's behalf. If not, they can seek professional assistance and an attorney can help them with legal conservatorship or guardianship which can also be used.
  The bottom line though is that yes, there are programs that can help them and if they intend to use one of them, they should contact us or visit our calculator to see what they could expect in benefits and if that works for them and their needs, they can discuss the POA or other requirements.
  Reply to ARLO
Allen
November 4th, 2019

I have a reverse mortgage for the past 5 yrs my wife is 77 & I am 78. We have had some health problems the past 2 yrs but are not late on anything I would like to refinance and get about $30,000 out of the house. We bought it for $225,000 and home like this are now selling in our area from $260-300k. Is this possible?
Reply to Allen
- ARLO™
  November 4th, 2019
  
  Hello Allen,
  I honestly can't give you an accurate answer with just this information, but I can tell you how you can find out quickly and easily. Visit our refinance calculator with a copy of your current statement handy and in just a minute, you can see if a refinance of your current reverse mortgage would be beneficial for you.
  Things like interest rates, your current balance, if you have any money left on your existing reverse mortgage and sales of your model will really affect your qualification under HUD's current guidelines. The online calculator takes very little time, there is no obligation and you can decide if you want to go further or not based on the numbers you see.
  Reply to ARLO
Dorothy J.
October 12th, 2019

When you have a reverse mortgage what do they mean when they say that you have not taken advantage of your 18 month waiting period. What does this mean?
Reply to Dorothy
- ARLO™
  October 12th, 2019
  
  Hello Dorothy,
  
  There is no 18-month waiting period on the HUD HECM program. I can only assume you are referring to a marketing piece you have received from an originator who is advertising refinancing reverse mortgages, and this is their "pitch".
  Most lenders who belong to the National Reverse Mortgage Lenders Association (NRMLA) must follow a code of ethics instituted to protect borrowers, and therefore most lenders will not allow a refinance of the loan for a minimum of 18 months. Refinancing any more frequently than that becomes a case of equity stripping rather than helping the borrower.
  Equity stripping occurs when originators talk borrowers into multiple refinance transactions with multiple fees over and over. We saw that happening several years ago and so even though HUD did not have an "18-month rule", the industry stepped in to protect borrowers from unethical originators bent on looking only to refinance loans to the detriment of borrowers.
  Since then HUD has also implemented rules that the loan must benefit the borrower in other ways as well. If you have a reverse mortgage, it is no doubt that you receive constant offers to refinance your loan. If an individual or company is now telling you that you have not taken advantage of an 18-month waiting period, it is a marketing attempt to garner your interest.
  What they mean is that you are beyond the 18 months that lenders require them to wait before they can refinance your loan and so they are now trying to convince you to check out their services.
  If you are considering a refinance, you may want to see what they have to offer but I would always encourage all borrowers to get multiple proposals to be sure you are getting the best deal for your circumstances.
  It always pays to get quotes from multiple rated lenders and not just one that sends you a flyer in the mail.
  Reply to ARLO
Jimmy C.
September 23rd, 2019

If you have a reverse mortgage in place and the value of the property has had a significant increase in market value, can you receive the additional equity the property has built?
Reply to Jimmy
- ARLO™
  September 23rd, 2019
  
  Hi Jimmy,
  
  You may be eligible to refinance the loan to take advantage of the additional equity but there are rules and benefit you must meet to be in accordance with the HUD requirements for a reverse mortgage refi. I would also recommend that if you are interested, you investigate it sooner than later.
  Eliminating the reverse mortgage to reverse mortgage refinance program is currently one of the reforms being discussed and it is entirely possible that the ability to refinance your reverse mortgage may soon be gone. But it is still here now and if you would like to see if it would benefit you, please feel free to check out your circumstances on our HECM refinance calculator.
  You will need your most recent statement to fill in all the information needed to run your numbers but you won't need to include personal information like social security number (as always, it will need your month and year of birth or that of the youngest borrower to run the calculations but not even an exact birth date). After you see what you could expect to receive, if you want additional contact, it's entirely up to you. There is no obligation and no pressure!
  Reply to ARLO
Vickie
September 15th, 2019

I already have a reverse mortgage how do I qualify to refinance?
Reply to Vickie
- ARLO™
  September 15th, 2019
  
  Hello Vickie,
  
  HUD currently has a couple of different requirements a borrower must meet in order to refinance their reverse mortgage including tests to make sure they receive adequate funds over and above their current reverse mortgage.
  
  However, I caution you that if you are serious about doing this, an announcement was just made that the refinance of HECM to HECM loans may be discontinued soon to help secure the program. I would urge any borrowers who want to consider a reverse mortgage to check it out now while it is still available.
  
  That is not to say that you should stampede to do something that is not beneficial for your circumstances. But if you are serious about wanted to do it, there may be a limited time left during which the refinance is available for the HECM program.
  
  There may still be an opportunity to refinance for some borrowers into a proprietary program but that would not cover as many borrowers as the HECM program would for existing reverse mortgage borrowers.
  
  If you would like to see if you meet HUD requirements, please feel free to visit our refinance calculator. You will need your current statement to be able to supply the needed information, but it is not difficult and there is no hassle or obligation.
  Reply to ARLO
Luis M,
September 10th, 2019

I recently applied to refinance my existing reverse loan, which I took out in May 2016. My current reverse statement shows an ending loan balance, of $186,000, which includes interest and mortgage insurance which I didn't pay and thus rolled into my reverse loan. The statement also shows $135,000 line of credit. The top entry in the Balances Summary section of the statement is $321,000 which is labeled Principal Limit.

My home appraised for $486,000 now; it was $429,000 in May 2016. Although the mortgage broker is charging me zero costs -- she says she's giving me credit for all the costs and will use her lender's compensation to do the credit, she said her firm is declining to do my refinance to lower my interest rate (with a reduced margin and reduced mortgage insurance premium, I'm reducing my interest by 1.75%, before factoring in the 1-yr libor index in my reverse) because the loan proceeds test is failing the required test. (She said that being the refinance is zero cost, the other test, closing cost test is ok.)

Asked how so, she said the calculation for the loan proceeds test is as follows: The new Principal Limit of the new reverse, which happens to be $312k, LESS the Principal Limit of $321k, per the reverse statement = a negative $9k. She said to pass the test, the result should be a positive amount, and that positive amount should be at least 5% of the new reverse Principal Limit. Is the broker's calculation of the loan proceeds test correct?
Reply to Luis
- ARLO™
  September 10th, 2019
  
  Good Afternoon Luis,
  
  It very well could be. HUD added a second level of requirements a while back which now has a requirement for both cost benefit and proceeds benefit. However, you may be able to do better with a lower margin.
  I would encourage you to try our HECM refinance calculator. There is no magic pill, but the lower the margin, the higher the proceeds are if she had you above the HUD floor.
  I don't know what margin she was offering so I cannot say. It certainly is worth a shot since it costs nothing to try and there is never any obligation or hassle.
  Reply to ARLO
Madeline B.
September 8th, 2019

I have a reverse mortgage and go to my daughter's house for five months in the summer. The reverse mortgage lender we have recently sent people from Guardian Asset Management to take pictures. We sign a form each year confirming our residency, so I am confused and concerned.

We are up to date on our insurance and taxes. Can we refinance even if we do not take out any cash, I just want to get away from these people. Finally, as long as we are in the home 6 months and a day we are in requirement for FHA insurance on this loan?
Reply to Madeline
- ARLO™
  September 8th, 2019
  
  Hello Madeline,
  
  Yes, you can refinance if you meet the HUD requirements. Rather than paying the costs for a new loan though if you aren't even looking for additional funds, I would advise you to contact the servicer and let them know that you visit your family during the hot months but never for more than allowed, that your home is definitely your primary residence and if they want to see a driver's license, bank account or whatever to see that you still only use that address you would be happy to supply any documentation they request.
  Reply to ARLO
Karl
August 19th, 2019

I am currently paying 1.25% mortgage insurance on a reverse mortgage started in 2013. Can this be reduced to the currently going rate of 0.5%?
Reply to Karl
- ARLO™
  August 19th, 2019
  
  Hello Karl,
  Only with a refinance and then the new loan would be under the current parameters.
  Reply to ARLO
Cori S.
August 8th, 2019

My parents got a reverse mortgage and they have spent every dime of the money and are now broke except for their Social Security monthly checks. Their home needs a roof to repair leaks and the estimate is $10,000. They cannot get a loan for this and have no way to get the money. Can the bank that they took the reverse mortgage out help in this situation?
Reply to Cori
- ARLO™
  August 8th, 2019
  
  Hello Cori,
  
  The loan can be refinanced and if they are eligible under the current guidelines, they may be able to access more funds. This is an unfortunate situation and I hope that your parents have the equity to obtain the funds they need.
  
  However, you need to take a good hard look at their total circumstances and determine if this is the right move for them. A refinance may not be in their best interest and if there is still strong equity, a move or downsize might be more in their best interest.
  
  We tell borrowers from the start that if the combination of the funds available from the reverse mortgage and no payment on the loan is still not sufficient to allow you to live comfortably in the home and have funds available for any other expenditures that may arise (like roof repairs), then maybe a reverse mortgage is not the correct solution for their circumstances.
  
  Many times borrowers do not want to think about downsizing and moving but if even after the loan closes and you have no payments on your home you have no ability to put money aside for anything that comes up for medical or home repairs, you may have to consider a downsize before you begin to use your equity to remain in a home you cannot afford.
  
  The time to have this conversation with family and loved ones is early on and it might be a difficult conversation to have, but it might be one you must have with them now.
  Reply to ARLO
Celeste
August 7th, 2019

Can you borrow on a reverse mortgage again?
Reply to Celeste
- ARLO™
  August 7th, 2019
  
  Hello Celeste,
  
  If you qualify under the current HUD guidelines, you can refinance an existing reverse mortgage and if you have not already refinanced the loan before, you would not have to pay the portion of the Up-Front Mortgage Insurance Premium that you had already paid.
  Reply to ARLO
Leno
July 29th, 2019

Hello ARLO! In 2012 did a reverse mortgage, the balance currently is $186,000, including MIP at 1.25, a margin of 2.25% for a total new interest rate 4.64%, the initial interest rate on mortgage was 2.46% with a cap of 12.46%. Current net principle limit is $162,883. My appraisal for this orig reverse mortgage was $490,000.

I have been receiving letters since last year to refinance and since spoke with a broker who quoted me a margin of 1.500%, initial interest rate 3.74%, expected interest rate 3.58%, 0.50 MIP rate, cap of 8.74%, initial line of credit 4.24%. Appraisal came in at $775,000, qualifies me for $209,711.18 and additional $50,747. in one year. The out of pocket costs total $2,698.00.

I don't think this is a good deal because $162,883 is included in the new amount. On the loan I have right now I paid $49.00. Will I have to pay the 2% upfront on this new proposal because it indicates on comparison MIP of zero?
Reply to Leno
- ARLO™
  July 29th, 2019
  
  Hello Leno,
  
  You do not have to pay the Initial MIP again if this is the first time you are refinancing the loan. The life cap would be 5% over the start rate and HUD will limit the amount you can receive in the first year but then all proceeds would become available after 12 months.
  The costs shown are probably the actual 3rd party costs in your area to close a loan (title, settlement services, appraisal, credit, flood, etc). Whether or not you feel the loan is a good deal for you depends partly on your circumstances.
  If you don't need the money, the only potential savings are a slightly lower margin, a lower MIP factor by .75% and the ease of mind that the rate on the loan will never go above the lower cap even if interest rates should rise.
  I think if it was my choice to make, I would do the math and see how long it took to recoup that $2,698 at the lower rate (don't forget you will be starting at a higher loan amount).
  Your savings of 1.5% (.75% lower margin and .75% lower MIP rate) would be about $2700 a year so you would recoup the cost of the refi in just one year, not to mention the fact that you would have the additional funds available should you need them.
  Reply to ARLO
Kat
July 21st, 2019

If you are on the title of a reverse mortgage home, is it easier to refinance the home when original borrowers move out. Like if need to go to an assisted living facility? Even if TVs person is under 62 and doesn't have great credit?
Reply to Kat
- ARLO™
  July 21st, 2019
  
  Good Afternoon,
  
  It really doesn't matter if the original borrowers are still in the home or not, you can refinance any reverse mortgage loan at any time if you are on title to the property. If they are also on title, they will also have to be part of the refinance or will have to deed off the title at that time I would imagine.
  I do not believe the new lender would grant you a loan request with others on title if they are not also on the loan but there is no prepayment penalty so you can sell the home or refinance the loan at any time you wish. Who is living in the home at the time the owners refinance is not a factor in the repayment of the reverse mortgage?
  What you DO need to keep in mind is that if you Deed the current reverse mortgage borrowers off title before you close the next loan, the lender would call that loan due and payable since the borrowers would no longer be on title. Therefore, you do not want to do that unless you are ready to pay off the existing loan.
  Reply to ARLO
Frances H.
July 21st, 2019

We took a reverse mortgage 03/12 in a lump sum, we are now 77 and 81 and only have $20,000.00 left, is it possible to refinance, loan is now $135,408.30, county appraisal on house is $231,862.00.
Reply to Frances
- ARLO™
  July 21st, 2019
  
  Hello Frances,
  
  You can refinance the loan and if you are eligible for more money under the current program parameters, then you can complete the refinance and obtain the additional cash. The home would need to be appraised again by an FHA-approved appraiser though, lenders and HUD do not use assessed values (which is probably good for most borrowers as assessed values, although not always, typically do not reflect the property's full market value).
  I always recommend that borrowers look at the sales in their areas of homes that are very similar in age, size and condition and see for how much those homes are selling to get a good idea of about where an appraisal on their home would come in.
  If you need some help with sales in your area, give us a call, we would be happy to help take a no obligation look at the sales in your area. We are not appraisers and we cannot guarantee any value, but in most cases, if there are recent sales available, we can come close to what you might be able to expect based on current market activity.
  Reply to ARLO
Jan
July 12th, 2019

I am 70 years old, will I get more money if only I take a reverse mortgage refinance than if I wait until my husband is 62 and we are both on the loan?
Reply to Jan
- ARLO™
  July 12th, 2019
  
  Hello Jan,
  
  HUD changed the rules a few years back to where it no longer matters. If you are married and your spouse also occupies the home, that age will also be used to determine the reverse mortgage benefit. The only real question is how you intend to take the money and what the effect that will have on your spouse. For example, if you are using all the funds at the close just to pay off your existing mortgage, there is no reason to wait if you don't want to.
  The benefit will be the same and your spouse, although he would be considered an eligible non-borrowing spouse and would not be on the loan, could also live in the home for life even if something happened to you (assuming he also meets all the reverse mortgage requirements such as paying the taxes and insurance, lives in the home as his primary residence and maintains the home in a reasonable manner).
  However, if you plan to use the line of credit and only take a little of the money at a time, if you do the loan before your spouse is 62, he would not have access to the loan funds if something happened to you. He could stay in the property but would not have access to any remaining funds on the line of credit so if that was the option you planned on selecting, you may want to wait until he is 62.
  Reply to ARLO
Bruce L.
July 2nd, 2019

We've had a reverse mortgage for many years. Our property value has gone up about $200,000.00 above the loan. Is redoing our reverse loan a wise objection?
Reply to Bruce
- ARLO™
  July 2nd, 2019
  
  Hello Bruce,
  
  Many people do refinance their reverse mortgage at some point to receive additional funds. The question of whether it is a good move or not depends on you and your needs/circumstances. For some borrowers, the cost and benefit are not advisable.
  For others, it is a very good choice. Even though you do not have to repay any portion of the initial mortgage insurance you have already paid, there are still costs to refinance even though the refinance is usually less expensive as a result than the original loan.
  HUD and lenders have rules that you must receive certain benefits before they will even do the loan because they do not want borrowers to fall victim to refinance churning, an act of refinancing the loan over and over where the borrower receives little benefit but keeps paying additional fees each time.
  
  Reply to ARLO
Christine L.
June 13th, 2019

If you have been on a reverse mortgage for years and want to refinance. do they have to look inside your home to appraise or outside being you're not leaving your home?
Reply to Christine
- ARLO™
  June 13th, 2019
  
  Hello Christine,
  
  Just like with any other refinance, it's a whole new loan and will be treated as such. That means that you will have a new appraisal with an interior and exterior inspection and the lender will review your income and creditworthiness.
  The good thing is that you will not have to pay the portion of the Up-Front Mortgage Insurance Premium that you already paid, that will roll over to the new loan.
  You would have to pay any difference due for example if the house is now a higher value and the new loan would be more than you paid on the existing loan. But again, you would only pay the difference between the two.
  Reply to ARLO
Polly G.
May 2nd, 2019

I purchased a home with a parent year ago but later would like to see if the parent (over 65) could apply for a reverse mortgage once I removed my name from the ownership title. Would I be able to co-sign on the loan if she refinances through a new lender?
Reply to Polly
- ARLO™
  May 2nd, 2019
  
  Hello Polly,
  
  If you and your mom bought a home together, she is and has been on title and now you wish to remove your name from title so she can get a reverse mortgage, that can be done. You need to remember that even if you both add your name back to title after the loan closes (which is allowed), the loan still becomes due and payable if anything happens to where mom is no longer living in the home (i.e. death or move to a permanent assisted care facility).
  If you are asking can you refinance the reverse mortgage later the answer is also yes. The loan may be repaid at any time with no prepayment penalty. If you are asking can you be a co-signer on a new reverse mortgage later, that would only be possible if you then qualified for the loan as well (if you were 62 or over, lived in the home and met all the other HUD requirements at that time). However, if you do meet the HUD program parameters, your mom could refinance and add you to the new loan.
  
  I do want to throw out one bit of cautionary advice though. HUD parameters, interest rates, property value and borrowers' ages all affect the amount for which you qualify under the program. The rising initial reverse mortgage loan balance continues to rise as you make no payments, you are coming in later as a younger borrower will receive a lower benefit, or higher interest rates could make the refinance unattainable.
  And if HUD changes the program parameters so that borrowers receive less money in the future, that could also block your ability to pay off the existing loan with a new reverse mortgage later. You need to be very careful when planning for a future refinance when you can't possibly know the circumstances that will be in effect at that time. I would make sure that you keep the balance as low as possible for the first loan.
  Otherwise, you may find yourself in a position where that loan becomes due and payable with no way to repay it because you were never able to refinance it with a new loan adding yourself to the new financing.
  Reply to ARLO
Denise G.
April 19th, 2019

My mother has a reverse mortgage on our property now. I'm interested in getting the reverse mortgage in my name. How can I do this?
Reply to Denise
- ARLO™
  April 19th, 2019
  
  Hi Denise,
  
  If you want to have a new reverse mortgage on this property in your name instead of or even in addition to your mom, you would need to be on title, be 62 years of age or older and qualify for a new loan. The old loan would have to be paid in full and the new loan would mean that you would also be covered for life if you live in the property and abide by the terms of the loan.
  Reply to ARLO
hector a moran
March 31st, 2019

how long after I got my first reverse mortgage can I refy w another revers mortgage, my home value went up from 545k to 520k
Reply to hector
- ARLO™
  April 1st, 2019
  
  HUD will not allow borrowers to churn refinances of their reverse mortgages and requires that there are tangible benefits the new loan must give the borrower before the loan may be refinanced.
  Furthermore, industry associations and most lenders have added an 18-month timeframe as an ethical standard so that borrowers are not pressured to refinance those loans too often as well. I do not know if your numbers are reversed in your question but as written, the value, from $545K to $520K declined -it did not increase.
  Assuming that it went from $520K to $545K and the numbers are reversed in the question and you have had the loan for more than 18 months, you would still be required to meet the HUD 5 times benefit rule and I do not believe with a $25K increase in value, that rule would be met in your case.
  Reply to ARLO
Shelby
March 18th, 2019

My parent has a reverse mortgage. I am 62, is it possible for me to be added to his reverse mortgage?
Reply to Shelby
- ARLO™
  March 18th, 2019
  
  Hello Shelby,
  
  You cannot add new borrowers to an existing reverse mortgage. The terms and benefits of a reverse mortgage are determined based on the age of the youngest borrower at the time the loan closes considering other factors such as the property value (or HUD lending limit, whichever is less), interest rates and actuarial tables for expected life expectancies for borrowers.
  If the program allowed borrowers to be added to existing loans, there would be no way to calculate the risks or for HUD to determine benefits since there would be no expected repayment dates. If the loan could simply be extended by adding children of reverse mortgage holders as they turned 62, the loans would likely seldom be repaid.
  
  However, having said that, if your parent(s) wish, they can refinance the loan at this time, adding you to title. Keep in mind that since you are 62 you will be at the bottom end of the eligibility of the loan parameters and therefore, you will eligible to receive the least amount available under the program.
  This may mean that the home will have had to have increased in value tremendously in order for the refinance to be done without bringing in a significant amount of cash to pay for a shortfall in benefits available vs amount owed on the current loan or the home would have had to be valued above the HUD limit at the time.
  But some properties have experienced this type of appreciation and some loans are still outstanding from times when HUD limits were much lower on higher valued homes so it is possible that it would work.
  
  Reply to ARLO
CJ
January 28th, 2019

My husband has a reverse mortgage...we were recently married. I am not on title to the home. He has $100000.00 line of credit. Should we pay off RM? Refinance RM with my name on it? Draw the $100,000.00 and save it? Which would be the best financially? OR... is there another solution? We have no one that wants to keep the home...Could we get a monthly income from new reverse mortgage?
Reply to CJ
- ARLO™
  January 28th, 2019
  
  Hello CJ,
  
  What the "right" choice is would be the one that is right for you both!
  For example, if anything happens to your husband now, you do not have the right to remain in the home on the current mortgage. He can add you to title which would give you the right to the home, but you would still have to refinance the loan or sell the house if you were unable to do so. If you take all the remaining funds now, you will accrue interest on those funds and unless you can get a return of at least the same rate as the interest you accrue, you are losing money by just putting the funds in the bank.
  
  You can refinance and get a loan in both your names, but you must qualify under today's refinance guidelines and parameters. If the property has increased in value or you can now take advantage of the new jumbo programs that are available, you may even have access to more money than you did before. If the property has not appreciated, with the interest accrued, the increases in interest rates over the years and HUD's changes, you may not be able to qualify for as much money as you currently have available on the line now.
  
  The only way to know the right decision is to know what the right decision is for you. If your number one priority is to be sure you also can remain in the home for life now, then you want to see about doing a refinance in both of your names. If you think that $100,000 would suffice even if something happened to your spouse and you had to sell the home and move, you may want to add your name to title now and take the funds out to ensure they are always available to you but just know that the balance owed will increase faster.
  I would suggest that you check out the circumstances you would both receive together on our online calculator so you can see what you would expect to receive with a new loan at this time. At least this way you will get an idea of where you stand and what your options truly are.
  And remember, whatever you choose, you can be added to title at any time which won't stop the loan from becoming due if something were to happen to your spouse but it would prevent you from having to worry about the title at that time and I wholeheartedly recommend you contact a title company to do that as soon as possible.
  Reply to ARLO
Barbara S.
August 29th, 2017

Hello

I have a reverse mortgage that I have had since 2011. It now goes up $1,000. a month. I am looking to refinance this to a lower rate and was told I may be able to do a reverse mortgage again. Please let me
know based on this information if that would be possible.

I am not looking for cash, just looking to get out of this 9% mortgage. My house is worth about $260,000.

I would appreciate your information with regard to this.
Reply to Barbara
- ARLO™
  August 29th, 2017
  
  Hi Barbara,
  
  The only way to know for sure is for you to send us a copy of your most recent statement with your date of birth (or at least the month and year of birth) written on it and then we can run the numbers and let you know!
  Reply to ARLO
Linda
July 12th, 2017

My parents maxed out on their reverse mortgage - no longer receiving payments. The house is worth more than the original loan amount. Can they tap into that equity with another reverse mortgage?
Reply to Linda
- ARLO™
  July 12th, 2017
  
  Hi Linda,
  
  They can always refinance with another loan if they can qualify for one or sell the home. It's their house and there is no prepayment penalty for paying the loan off. They have every option available to them as any other homeowner with any other type of loan.
  Reply to ARLO
Bernice
April 26th, 2017

If you already have reverse mortgage and house has doubled in price, can you get more money on it?
Reply to Bernice
- ARLO™
  April 26th, 2017
  
  Hi Bernice,
  
  You can only go to the maximum allowed on your current loan but you may be a perfect candidate for a refinance of that loan with a new reverse mortgage at the higher value. We have been able to refinance many existing reverse mortgage loans and often at little or no additional fees to the borrower (and I don't mean we just add them to your loan balance, we actually pay them for you when possible meaning you have incur no costs to place the new loan).
  
  This may be possible because HUD will give you a credit for the MIP that you paid on the first loan and often the costs are low enough that we can pay them on your behalf. If you have a reverse mortgage and are considering refinancing the loan. I would encourage you to check with us before paying any costs to do so, you may be able to save thousands of dollars and be a lot happier because that money is money that will now be available to you, for your use, instead of going toward paying fees.
  Reply to ARLO
Larry Joyner
November 1st, 2016

What are the requirements for a jumbo reverse mortgage, and could it be used to refinance an existing reverse mortgage taken in 2010
Reply to Larry
- ARLO™
  November 1st, 2016
  
  Hello,
  A Jumbo Reverse Mortgage can be used to refinance an existing Reverse Mortgage. In order to determine if it would work for you, please give our office a call with your most recent Reverse Mortgage Statement available so that we can run the calculations to see if it would work for you.
  Thank you
  Reply to ARLO
Susan
August 14th, 2016

My dad got a reverse mortgage in 2006. He is failing in health & my sister & I went to sell his home. We found out he is not even on the deed to the house. How is it possible to get a reverse mortgage on a property that you are not on the deed?
Reply to Susan
- ARLO™
  August 15th, 2016
  
  Hi Susan,
  You have asked a question I cannot answer! You must be 62 years of age and own the home to qualify for a reverse mortgage loan and so if your father did in fact receive a reverse mortgage on a property on which he is not a vested owner, I could not begin to guess how that happened.
  I don't know if he was the spouse of the former owner and the loan was not called due and payable when that owner passed, if a Deed was never recorded that should have been, if there was a Deed that recorded after the loan closed, or if there was another mistake made at that time - or if your father is on title and your title search at this time is flawed and the person who did the search simply missed the transfer Deed that added him to title.
  Did dad ever own the property or did he Deed away his interest as part of the transaction, or was there a Deed from dad to someone else that was never recorded and dad did apply for the reverse mortgage? So many possibilities and this does not begin to cover them all.
  At any rate, it would be mere conjecture for me to try to guess what has transpired or could have happened not knowing any of the facts at this point. The best thing would be if you still have the records from when the reverse mortgage was obtained available to you.
  Maybe dad has a drawer with his copies of the application package, the closing statement and other documents from the closing in the home somewhere that you can review? If so, you would know if dad is unable to tell you what happened, if your next questions needed to start with a title company, the lender or an attorney.
  Reply to ARLO
Ron Bruns
July 29th, 2016

My mother passed away leaving me as trustee acreage with a manufactured home and a 180K Reverse mortgage balance to pay off. I own my own home, which is my primary residence. so what type of loan will the lenders accept? No luck so far trying to secure an investment property loan, even with my stellar credit. The property is worth 500K. No one will help me.
Reply to Ron
- ARLO™
  July 29th, 2016
  
  Hi Ron,
  
  The lender will accept any loan you obtain to pay off your reverse loan, they really have no say in what financing you secure to pay off their loan. With that much equity and good credit, with any kind of steady income I would think you would have no problems, if you found the right financing source. I would suggest you contact a local bank or realtor in the area of the property as they are normally very knowledgeable about the programs available for properties the area in which they specialize. Local real estate professionals' livelihoods depend on their ability to locate financing for properties just like yours when they are engaged in the sales of such and therefore keep themselves abreast of as many financing sources as possible as their sales often depend on it.
  
  I wish you much success.
  Reply to ARLO
  - Ron Bruns
    August 30th, 2016
    
    The banks and mortgage companies are rejecting me due to the levels of "risk" involved with my particular situation. 1. Manufactured home = Deprecating asset. 2. Property not my primary residence. 3. Property held in a trust. (Of which I am the trustee) I've been attempting to secure this loan as an income
    property. No standard lender will touch it. Any suggestions?
    Reply to Ron
Joyce Sims
July 26th, 2015

I have a reverse mortage with a company in Texas I want to apply for a second do I have to stay with them or can I go through another company I am 76 years of age
Reply to Joyce
- ARLO™
  August 3rd, 2015
  
  Hi Joyce,
  You do have to meet the HUD requirements to refinance your existing reverse mortgage, but that can be done with any company, it does not have to be done with your current company.
  Reply to ARLO
Esther Maddox
January 26th, 2015

We are thinking of getting a reverse Mortage with quicken. &
Loan but they called today and said if appraisal is $80,000 we would get. $21,000 lump sum that sure is low. Can a reverse Mortage be paid back any time and without having to move ,sell, or die .I might be getting funds from some of my vacant land I sell. Thank you maddox
Reply to Esther
- ARLO™
  January 27th, 2015
  
  Hi Esther,
  The lump sum that HUD allows is low but if you do the line of credit option, you can take a lump sum and then there is a second lump sum available to you after 12 months. I would be happy to show you the amounts available in the first 12 months and any time thereafter but I am sure that your current lender can (and should) as well.
  To answer your other question, there is never a prepayment penalty with a reverse mortgage so you can repay it in part or in whole at any time without penalty. Please feel free to give us a call or send us an email if you have any questions at all.
  Reply to ARLO
colleen
August 11th, 2014

2011-I got a reverse mortgage-my name only. $58190.oo -2.77 highest interest per annum. One Reverse Mortgage sold to Silver Bank--all fine but could not redo to put husband on.
May,2013-health a lil scary and wanted husbands name on it. old enough now!
PROFICIO TAKES IT ON-IT IS $56,466 on house value at 140,000
PAID OFF TO Silver Bank and add $3000.00 mortgage insurance plus costs new cash to us $24,021.05-new mortgage $84,375.00. (56 466 + 24 021=80,487
They sell to CELINK and in 13 months it is $90,553.00 4.99%
We see they charge 93 90 for mortgage insurance every month-why?
We thought the one time mortgage insurance was it-doesn't that insurance come into play if payment is not made-which does not apply in REVERSE MORTGAGE. Is this all up and up?
It appears Proficio charged $760 at 1 1nd 1/4 % on this new part of loan and told us the interest was comparable.
Reply to colleen
- ARLO™
  August 11th, 2014
  
  Hi Colleen,
  There are two elements to the Mortgage Insurance on every FHA-Insured loan (both reverse mortgages and forward mortgages).Â You have the Up Front or now referred to as the Initial Mortgage Insurance Premium (IMIP) and then you have the renewal.
  When you refinance a reverse mortgage and you are keeping one of the borrowers the same and just adding a new borrower, then you do not have to re-pay any portion of the IMIP that you already paid, but you would have to pay the difference, if any, from the old premium to the new if the new premium was higher.Â
  For example, if your old premium when you originally closed the loan was $3,000 but based onÂ today's HUD guidelines and your property's value the IMIP would be $4,000 to close the loan, you would not have to pay the first $3,000 that you had already paid but would be responsible for the additional $1,000.
  The monthly premium accrues on all FHA reverse mortgage loans and it is currently based on 1.25% of the outstanding balance for renewal of the insurance.Â The insurance protects you in the event the lender ever goes out of business and you are still looking for payments on your reverse mortgage loan, it protects the lender in the event of default or excessive loan to values and without the insurance, the loan would not be available.
  With regard to the costs, as long as the lender did not exceed HUD's maximum and they disclosed all of this to you in the beginning, then they are ok on their charges.Â However, I urge borrowers to shop a few lenders and compare the costs.Â I know it's too late now but we typically do the refinance loans without origination fees and often can do them with less than $700 in total fees.Â It pays to compare.
  Reply to ARLO
Pam Hoffman
March 25th, 2014

Thanks so much for your comments, Mike! I will share with my husband & look into getting permission now to partition the property. We will certainly keep you in mind, after we do our "homework." Have a great day!
Reply to Pam
ARLO™
March 21st, 2014

Hi Pam,
I'm sorry but on this question I really have to refer you to the tax specialist. We are not licensed nor legally allowed to give accounting advice and I really am not even familiar with the Turbo Tax Software so I wouldn't be of much assistance you to in that arena either. I wish you the best.
Reply to ARLO
CARL
December 8th, 2013

I purchased a "four" unit property (short sale) to live in two years ago using a reverse mortgage. The property appraised for $360k. The property was in poor condition compared to identical properties in the area that were sold or valued at about $550k. After investing more than $150k into the property I have been told that mine will easily appraise for $600k. My original Principal Limit was $244k and currently has risen to $265k. My balance is $200k. As I settle in to retire I would like to increase my Principal Limit by refinancing with a new Reverse Mortgage so funds will be available if I should ever need them in the future. What would my new Principal Balance be if I refinance with a new Reverse Mortgage based on a property appraisal of $600k? And what will my costs be if I apply for a variable interest rate or fixed rate loan and take all the money up front? From reading other's questions, I understand PMI will only be charged on the increase between the two loans. Thanks!
Reply to CARL
- ARLO™
  December 11th, 2013
  
  Hi Carl,
  There really is no way to determine 100% the eligibility amounts or all of your options without a little more specific information on a HECM to HECM refinance and would need a copy of your most recent statement, the zip code where the property is located and your month and year of birth to be able to give you a more accurate answer. HUD has changed the program from when you received your last reverse mortgage and borrowers no longer receive as much money under the program as they did before.
  Also, you can no longer get all the available proceeds as a lump sum under the new guidelines. But as a "general" response, I would say that based on the numbers I do have, you would probably qualify under the HUD rules for the refinance requirements. We would have to run the actual numbers to see that you meet the HUD 5 times benefit rule and I would be happy to show you how much you would be able to receive, and the options for receipt of the funds if you would like to send us the information requested above.
  On your last point, you do only pay the difference of the Mortgage Insurance that you paid on the last transaction and the premium on the new program, but another important thing to remember is that the HUD Up-Front Mortgage Insurance Premium (UFMIP) on the program for loans utilizing the amount of the program that you would (greater than 60% of the available Principal Limit) has been increased to 2.5% from 2%.
  So, on $360,000 at 2% your old UFMIP would have been $7,200 and the new value of $600,000 at 2.5% is $15,000 so the difference that would be due with the refinance would be $7800.00.
  Reply to ARLO
ilona
August 14th, 2013

I HAVE A QUESTION.THE HOUSE IS ON REVERSE MORGAGE AND BECAUSE OF MY AGE MY HUSBAND TOOK MY NAME FROM THE TITLE / 23 YEARS DIFFERENT/IF HE REFINANCE THE REVERSE MORGAGE , CAN HE PUT MY NAME BACK ON THE HOUSE?
Reply to ilona
- ARLO™
  August 28th, 2013
  
  Great question Ilona!
  
  This is something that I am often asked, and I want to make sure that people are clear on the answer. Yes, HUD does allow the borrower to refinance the loan and they will even waive the 5 times benefit requirement when bringing on a previously under-aged spouse.
  
  But you have to remember that the younger spouse will receive a lower amount of benefit than an older spouse in most instances and therefore, the mount you would be eligible for when you turn 62 will probably be less than your spouse received in benefits. This is especially true if HUD lowers the benefits for the program is we all expect them to do in the very near future.
  
  To further make it harder to refinance if borrowers do not plan ahead, the interest that accrues on the reverse mortgage may make the loan amount required to pay off the existing loan even further out of reach for a new reverse mortgage if borrowers borrowed the maximum amount on the first loan and then accrued interest on the loan.
  
  So the actual answer is yes, you can refinance it when you turn 62 to add yourself to the loan but the practical answer is that if you plan to do it, you need to be very careful that you do not run up the balance to a point where the new loan will not allow you to unless you keep a portion of the funds available to pay down the balance if required.
  Reply to ARLO
Larry Joyner
July 12th, 2013

Thanks for the explanation. Very clear.
Reply to Larry
Larry joyner
July 10th, 2013

I currently have a reverse mortgage with an fixed interest rate of 5.56%. My current outstanding principal balance is $525,745.71. The original appraisel in 2010 was $814,000.00 which i consider as low. My question is whether i could refinance for some lump sum of credit line. If not, could the rate be lowered effectively?
Reply to Larry
- ARLO™
  July 11th, 2013
  
  Hi Larry,
  The honest answer is yes, HUD allows for this, but the practical answer is that your loan would not qualify for the refinance. Firstly, for a HECM to HECM refinance, you must have what HUD refers to as a "5 times benefit". In other words, you would have to get at least 5 times the cost of the new loan in benefits from the loan.
  Since the Lending Limit is $625,500, in today's market, the maximum Principal Limit that any borrower would receive is $485,388 which means that not only would you not receive a 5 times benefit, even if you were at the age where you received the maximum benefit (90 years old), you would still have to bring money in just to close the loan and would therefore not receive any benefit, let alone 5 times the cost to get the new loan (minimum of around $13,000 and could be much higher depending on where you live and what the closing costs are). If you are not yet 90 years old, then your benefit amount under the program would be less than the $485,388 requiring you to bring in yet more money.
  Each loan is an individual loan made by a lender and then securitized and the security is then sold in the secondary market as a GNMA security. The investors who buy the securities do so knowing what return they will receive and therefore there is no interest rate reduction feature available. The loan has no prepayment penalty at any time, so you do have the option of refinancing with other types of financing. If you ever choose to sell your home and relocate, that too is an option with no prepayment penalty.
  Unfortunately though, when you start out at the maximum amount the program will allow (as you did with an appraised value of $814,000), and then you begin to accrue interest, you don't leave yourself any room for growth under the program later.
  Reply to ARLO
vivian
May 30th, 2013

i have an HECM loan for 2 yrs. total loan balance is $238.000, loan interest rates 4.999%. I now wish to move to another state to be near family. currently not feelinf safe alone. Please inform me as to my options. thank you
Reply to vivian
- ARLO™
  June 4th, 2013
  
  Hi Vivian,
  Just like any loan, you own the house and you can sell it at any time. The reverse mortgage has no prepayment penalty and so all you need to do is the same thing you would in any other circumstance - list your home and sell it and the loan will be paid in full through the closing and any remaining equity would be paid to you by the closing agent.
  Reply to ARLO
Joanna
May 9th, 2013

Hello
Recently my boyfriend's grandfather passed away. He had a Revese mortgage on his home. His son ( my boyfriend's father) is moving away and he is not interested on owing nor being the heir of that house. Is it possible for me ( as athird person) to buy the house from the heir ( in this case, my boyfriends father) and pay off the reverse mortgage remaining debt? Can I buy this house from him or it has to be bought from the bank? What would be the difference, economically and legally speaking? I need some guidance, I dont even know where to start. Thank You
Reply to Joanna
- ARLO™
  May 21st, 2013
  
  Hi Joanna,
  Your boyfriend's father owns the home, he can sell it to whomever he wishes. Whether or not it makes economic sense for you would depend on your circumstances. He can keep the home by paying off the existing mortgage at the amount owed or 95% of the current market value of the home, whichever is less.
  If the home is worth more than is owed on it, he can "sell" to you or simply deed the home to you but you have to realize that the loan is still going to be due and payable to the lender and you will need to pay off the amount owed or you would lose the home to foreclosure.
  The foreclosure would be against your Boyfriend's Grandfather as he was the one who agreed to the loan terms and so your credit would not be affected, but you would lose the house nonetheless so you may want to keep this in mind if there is to be any money changing hands.
  I would definitely tell you to contact the current lender from the servicing statement and also to get the advice of a good real estate attorney before you entered into any contracts or paid any money to anyone.
  Reply to ARLO
Margaret Greene
March 11th, 2013

Good day,
I have a question. I realize that there are some changes about to go into effect with the reverse mortgage. I would to take one out before the deadline and need your advise. Which company would you recommend that has the lowest interest rates? I would also like to know if there are any suggestions you might have to make this process for me as easy as possible. I would like to take a lump sum out.
Thanks
Margaret
Reply to Margaret
- ARLO™
  March 12th, 2013
  
  Hi Margaret,
  I would love for you to compare our rates and fees to any company. Regardless of which company you ultimately choose, keep in mind that you do not have much time left to complete your counseling and begin your loan if you plan to utilize the fixed rate option. We do not charge an origination fee on the fixed rate loan and there are several interest rate options which will even give you more funds with a slightly higher rate if that if your goal.
  We would be happy to make this as easy a process for you as possible should you choose to go with All Reverse.
  Reply to ARLO
Margie Rose
February 26th, 2013

My parents are both now deceased, they have a reverse mortgage on the home and leaving

me heir to the home, I am also over 62 years. My question, can I get a reverse mortgage

on top of the old reverse mortgage? Or can I refinance with signing a new reverse mortgage

and will the new signing pay off the old reverse morgage?
Reply to Margie
- ARLO™
  February 26th, 2013
  
  Hi Margie,
  Being over 62, you do meet the requirements for a reverse mortgage of your own. The loan will be based on the home's value or the HUD maximum Limit, your age, and interest rates so depending on those factors when your parents secured their loan, you may or may not be able to get a loan that is sufficient to pay off the entire balance on the existing loan.
  The only way to know is to have a reverse mortgage lender run your information through the calculator to see what your benefits will be. If your benefit amount is not adequate to cover the entire balance owed on your parents' reverse mortgage, you can come in with the difference to allow you to still close using a reverse mortgage if you so choose.
  Of course you could always utilize other financing instead of a new reverse mortgage if you wish instead. However, the existing loan would have to be paid off now that your parents are no longer living in the home.
  Reply to ARLO
Julie C.
January 29th, 2013

Hello - My aunt has a reverse mortgage for her condo. She is 83 and in failing health. If she passes on, would my husband and I be able to refinance the loan to keep the property (for rental) or would the property need to be sold to pay back the loan? I want to be able to have all the answers for my aunt when we sit together to review everything (I'm her power of attorney at this point and will be the executrix of the will when it is written). Thank you for any help you can provide.
Reply to Julie
- ARLO™
  January 29th, 2013
  
  Hi Julie,
  I'm sorry that your aunt feels she has to worry about this at a time when her health is not good. If you are your aunt's heir, she does not have to worry about whether or not you can keep the property after her passing. As her heir, the property would become yours and what you did at that time is entirely up to you. You could refinance the loan with other financing and keep the property, you could sell the property and pay the loan off with the proceeds or you could pay the loan off with other funds available to you. In fact, the first thing that you want to do is find out the value of the home.
  If the current value is less than what is owed on the home, you can pay off the loan by paying 95% of the current value of the property rather than the full balance of the reverse mortgage. Heirs can also choose not to become involved in the sale of the home if they do not wish to and neither HUD nor the Lender can ever seek to repay the loan with any other assets - the home is the sole source they can look to for repayment of the debt.
  This is a time when your aunt should be concentrating on improving her health, not worrying about her reverse mortgage. Luckily, you don't need to worry about it either since you can choose the course of action that is best for you and your family as well.
  Reply to ARLO
s2kreno
January 28th, 2013

Good morning,

I am curious about refinancing to a fixed rate. If you have incurred a balance under a scheme of monthly payments and a variable rate, can you convert that balance to a fixed rate (lump sum) when you refinance?
Reply to s2kreno
Raymond P
March 25th, 2012

I have a reverse mortgage with a line of credit for $75000 which is used up. I would like to refinance for a lump sum. The house was appraised at $136000 a year ago and the taxes say it is worth $184000.
Reply to Raymond
- ARLO™
  March 26th, 2012
  
  Hi Raymond,
  HUD has some very precise requirements on the reverse mortgage refinance but they can be done. It will all depend on the parameters that were in place when you did your first reverse mortgage and what your current benefits are. There are also some exceptions HUD will allow so your best bet is to contact us with your most recent monthly statement available and we will be happy to run the numbers.
  You may just qualify for a low fixed rate and you won't have to pay a second time for any Up-Front Mortgage Insurance Premium for which you have already paid.
  Reply to ARLO
Sandra
January 30th, 2012

I just want to see about refinancing my reverse mortgage, are the current interest rates lower?
Reply to Sandra

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