What You Need to Know About Refinancing Reverse Mortgages

Handling your finances can be quite tricky at times. Luckily, there are ways to tackle them in a way that will help improve your financial standing. One of the best ways to do this is through refinancing. If you aren’t familiar with the term, refinancing simply means renegotiating the terms of your current mortgage. This can be applied to just about every type of mortgage that is available to you.

While we’ve already talked about the benefits of reverse mortgages, there will still be cases wherein refinancing will be your best choice to improve your financial situation. However, refinancing reverse mortgages is different from other types of mortgages. This is why we thought it would be useful to put together a short discussion on everything you need to know about refinancing reverse mortgages.

Can Reverse Mortgages Be Refinanced?

Many of you may not know this but reverse mortgages can actually be refinanced. However, things are going to be a little different. Since reverse mortgages have the borrowers make regular payments to you instead of the other way around, reverse mortgages can only be refinanced under certain circumstances. So how do you qualify to refinance a reverse mortgage?

The thing you have to understand about this is that lenders are taking on considerably more risk when they allow you to refinance reverse mortgages. Because of this, borrowers are generally more strict when it comes to who can refinance. This means that you’ll have to have a good credit score as well as sufficient earnings to qualify for refinancing. On top of all of this, it is also recommended that you meet with a loan counselor that specializes in reverse mortgages in order to increase your chances to get approved for refinancing. If you do qualify for refinancing, you also have to wait at least 18 months after the reverse mortgage was made before you can refinance.

Are There Differences in Refinancing HECM and Non-HECMs?

Aside from the things mentioned above, refinancing also has other requirements depending on whether your mortgage is Home Equity Conversion Mortgage (HECM) or non-HECM.

If your mortgage is from the HECM, you are subjected to the same requirements as the original HECM. This means that you have to meet the financial obligations of owning a home. This includes property taxes, homeowner’s insurance, and homeowner’s association fees. Lastly, you also have to be at least 62 years of age without delinquencies regarding federal debts.

On the other hand, non-HECM’s differ depending on the lender. Usually, this entails that the lender is financially stable. This means you should have enough equity in your property to support the reverse mortgage. It also has to be stated that non-HECM refinancing are incredibly uncommon as private lenders don’t see any financial benefits from letting lenders refinance their reverse mortgages. For more information on this, it would be best to speak with your lender.

Reverse Mortgage in Dallas with Michael Harrell Group

We hope this article proves to be useful when it comes to helping you refinance your reverse mortgage. We understand that refinancing can get rather intimidating, but don’t let this stop you from exploring your refinancing options as refinancing can really help your finances.

If you’re looking for help when it comes to managing your finances, then you’ve come to the right place. We here at the Michael Harrell Group can help you apply for a reverse mortgage in Dallas or anywhere in Texas. To get started now, please call (214) 269-3593.