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Michael G. Branson, CEO of All Reverse Mortgage, Inc., and moderator of ARLO™, has 45 years of experience in the mortgage banking industry. He has devoted the past 20 years to reverse mortgages exclusively. (License: NMLS# 14040) |
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All Reverse Mortgage's editing process includes rigorous fact-checking led by industry experts to ensure all content is accurate and current. This article has been reviewed, edited, and fact-checked by Cliff Auerswald, President and co-creator of ARLO™. (License: NMLS# 14041) |
By 
Michael G. Branson
Edited by 
Cliff Auerswald
Michael G. Branson
Edited by 
Cliff Auerswald
All Reverse Mortgage’s Refinance Calculator is designed to assist homeowners with an existing reverse mortgage in evaluating the benefits of refinancing.
This calculator focuses on leveraging a higher appraised home value for a larger principal limit, reducing interest rates, or adding an eligible spouse to the loan.
Table of Contents
Steps Using our HECM Refinance Calculator
- Input Current Reverse Mortgage Info: Enter details of your existing reverse mortgage. This includes the original amount borrowed and your current loan balance. This data is crucial for an accurate refinance assessment.
- Estimated Home Value: Provide your home’s estimated market value. This figure is important as it determines the equity available and influences the refinancing benefits you could gain, especially if your home’s value has significantly increased.
- Age of the Youngest Borrower: In reverse mortgage calculations, the age of the youngest borrower is key as it impacts the borrowing amount, with age significantly determining your new principal lending limit.
- Reverse Mortgage Results: The results from the calculator offer a comprehensive comparison between your current reverse mortgage and the potential new HECM. This comparison highlights key differences in equity availability, interest rates, and borrowing limits.
- Informed Decision-Making: Armed with these insights, you can make a more informed decision about the financial viability of refinancing. While this calculator offers valuable estimates, seeking advice from financial advisors or a reverse mortgage counselor is recommended for a more personalized analysis.
Evaluating the Pros and Cons of Refinancing a Reverse Mortgage
Refinancing a reverse mortgage is particularly advantageous if it offers significant benefits such as improved terms, an increased borrowing limit due to a rise in home value, or lower interest rates.
However, it’s important to weigh these benefits against any associated costs and consider how they align with your long-term financial goals and estate planning strategies. All Reverse Mortgage’s calculator is designed to guide you through this decision-making process.
Refinance FAQs
Q.
How does a reverse mortgage refinance calculator work?
A reverse mortgage refinance calculator is similar to the standard reverse mortgage calculator in that it utilizes the home value, age of the youngest borrower or spouse, and current interest rates to determine the maximum loan amount available. A reverse mortgage refinance calculator differs because it must consider the Mortgage Insurance Premium paid on the previous loan and the available funds for the existing loan to determine if a net tangible benefit can be achieved with a new refinance.
Q.
When is it a good idea to refinance my reverse mortgage?
It is a good idea to refinance your reverse mortgage when you can receive a significant benefit. A significant benefit would be the added available proceeds or a significant reduction in the loan interest rate.
Q.
Would refinancing my reverse mortgage trigger any tax deductions?
You should always consult your tax professional when determining if a refinance of your reverse mortgage could trigger any tax deductions.
Q.
Is it ever a good idea to refinance a HECM into a proprietary reverse mortgage?
There are instances when refinancing an HECM into a proprietary reverse mortgage could be a good idea. The HECM program has a maximum claim amount set by HUD, which, for the year 2024, is currently $1,209,750. Any home value above and beyond that limit does not factor into your available loan amount. If you have a home worth significantly north of the HUD limit, refinancing to a proprietary loan would allow you to borrow significantly more money than the HECM program will.
Q.
How does refinancing a reverse mortgage work with the insurance premium initially paid?
When you refinance a reverse mortgage loan, you get credit for the mortgage insurance premium paid on the previous loan. The current HUD formula for mortgage insurance on a refinance is the current max claim minus the previous max claim times 3%. For example, let’s say you did your first reverse mortgage loan at a home value of $400,000 and paid 2% in upfront mortgage insurance premium ($8,000). If you are refinancing with a home value now of $600,000, you will take ($600,000-$400,000 = $200,000 x 3% = $6,000). In this instance, the amount paid on the first reverse mortgage would exceed the amount due on the new loan, and therefore, the customer would pay $0 in upfront mortgage insurance to refinance their loan.
Guide to All Reverse Mortgage Calculators
| Type of Calculator | Purpose | Features | Includes Rates/APR |
|---|---|---|---|
| Reverse Mortgage Refinance Calculator | HECM to HECM Refinance Analysis | Assists in Evaluating Whether Refinancing Your Existing Reverse Mortgage is Advantageous, Considering Current Home Value, Interest Rates, and the 5x Benefit Rule. | No |
| Reverse Mortgage Line of Credit Calculator | Specialized Tool for Estimating HECM Line of Credit and Simulating Credit Line Growth Rates | Estimates Your Available Credit Line from a Reverse Mortgage and Projects Its Growth Over Time. | No |
| Reverse Mortgage Amortization Calculator | Loan Balance and Equity Simulator, Negative Amortization Schedules | Offers a Comprehensive Analysis of Loan Balance, Equity, and Accrued Interest Changes Throughout the Life of a Reverse Mortgage, Complete with an Excel File for Personal Tracking. | Yes |
| All Reverse Mortgage Calculator | Detailed Calculations for Monthly Payments, Single Lump-Sum Disbursement, and Line of Credit Options | Calculation of What You Could Get from a Home Equity Conversion Mortgage (HECM) or Jumbo/Proprietary Reverse Mortgages | Yes |
| Free Reverse Mortgage Calculator | Basic Calculations for Estimating Monthly Payments, Single Lump-Sum Payouts, and Available Line of Credit | Quickly Estimate Your Reverse Mortgage Payout Without Personal Details. | No |
| Reverse Mortgage for Purchase Calculator | HECM for Purchase | Calculates the Funds Needed to Buy a New Home with a Reverse Mortgage, Taking into Account Your Down Payment and Net Income from the Sale of Your Current Home. | Yes |
Do you need assistance or have any questions about which calculator to use? Don't hesitate to reach out to us. Our expert team is just a phone call away at (800) 565-1722, ready to offer you tailored advice and support.
Also See: HECM-to-HECM Refinance ‘5-Times’ Benefit Rule Explained
