Refinance Reverse Mortgage Orange County
Many homeowners refinance their conventional mortgages to get better terms as they reduce their home loans
Another option is of refinance reverse mortgage, a loan that enables senior citizens to access their home equity without selling or making regular payments.
Here’s how a refinance reverse mortgage operates and when it might be advantageous financially to do so.
KEY LESSONS
- With a reverse mortgage, homeowners who are 62 years or older can access their equity without having to sell their homes or make regular payments.
- The loan is postponed until you sell the house, vacate the property, or pass away.
- A new loan replaces an existing mortgage with better terms through refinancing.
- Refinance reverse mortgage can help borrowers get more money, a better rate, or the ability to include a spouse in the loan.
Refinance Reverse Mortgage – What it is?
This is known as a refinance, when you use funds from a new loan to pay off an existing mortgage. Homeowners typically do refinancing to get better loan terms, like a lower interest rate or a shorter loan term. You are left with a single loan, and a single monthly payment after your lender uses the new loan to pay off the old one.
Although it’s a standard method for enhancing the terms of conventional (or forward) mortgages, refinancing is also a choice if you have a reverse mortgage. In essence, when you refinance reverse mortgage, you exchange your current loan for a new—and, ideally, better one.
The new loan could be a conventional (or forward) mortgage or reverse mortgage.
Your age will determine the new loan amount for a new reverse mortgage, the value of your home, and the interest rate, just like it would be for a new loan.
The loan’s proceeds may be paid off as a line of credit, as regular monthly installments, or as a mix of the last two.
On the other hand, the new loan will depend on your
- income,
- credit score, and
- interest rate
If you refinance into a conventional mortgage, just as it would be if you were applying for a mortgage for the first time. A cash-out refinances an option if you require funds for retirement.
With this type of loan, your existing mortgage is replaced by a larger loan, and you get the difference in cash. A home equity conversion mortgage (HECM), insured by the Federal Housing Administration (FHA) and made available by FHA-approved lenders, is the most popular type of reverse mortgage.
Eligibility for Refinance Reverse Mortgage
The prerequisites for obtaining a reverse mortgage for the first time and those for refinancing one are very similar. Refinancing into a new HECM reverse mortgage requires that you:
- Sixty-two years old or older.
- Own it outright or have a sizable equity stake in it.
- Reside there as your primary residence.
- Not owe any back taxes to the government (e.g., taxes or student loans).
- Possess the money necessary to cover homeowner's insurance, association dues, property taxes, and maintenance costs.
- Attend a consumer information session led by a counselor approved by HUD.
- Your reverse mortgage cannot be refinanced within the last 18 months.
The property must also meet FHA requirements, including having adequate insurance and being free of hazards to one’s health or safety. A cash-out refinance you to access up to 80% of your home equity as opposed to the 50% to 60% you could with a reverse mortgage.
Refinance Reverse Mortgage Factors
- Your house is now worth more money.
- Your home equity may have increased if the value of your house has gone up.
- If so, a new reverse mortgage might allow you to receive more money.
- Rates of interest have decreased.
- Suppose rates have dropped since you obtained your initial reverse mortgage. In that case, the payout and total interest you pay when the loan matures may be higher.
- You wish to include a spouse or companion.
- To protect them if you pass away first, you must refinance the loan and add a co-borrower.
- A reverse mortgage cannot simply be expanded to include a new borrower.
- The HECM cap has been raised.
- A new reverse mortgage might allow you to access more equity if the limits have increased.
- You need more money than what your reverse mortgage can give you.
- You can borrow more money than you owe with a cash-out refinance into a conventional mortgage and keep the difference in cash.
Is It Possible To Obtain A Second Reverse Mortgage?
There can only be one active reverse mortgage at a time for borrowers. However, borrowers who have settled a reverse mortgage may apply for another one. Additionally, borrowers who already have a reverse mortgage can refinance it into a different reverse mortgage.
Why Giraffe Lending?
If you are considering to refinance reverse mortgage, please call us right away. Giraffe is bringing transparency and trust to reverse mortgage applicants. Our goal is to help senior home owners transform their retirement into an exciting and rewarding time.
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