What You Need to Know about Reverse Mortgage Refinancing

A reverse mortgage is a sort of home equity conversion mortgage (HECM) that offers homeowners to receive income without needing to repay the loan or make monthly payments. A reverse mortgage is a sort of loan that permits seniors over the age of 62 to borrow against the equity in their home without selling it. The loan pays the borrower a monthly income until they die or move out, at which point the house is sold and the revenues are used to pay off the loan, or the heir pays off the remainder of the balance in which they are able to keep the property.

The Difference Between a Home Equity Line of Credit and Reverse Mortgage Refinancing

The lines between home improvement loans and home equity loans can be difficult to differentiate. A home equity loan is used for purposes like improving your house or paying for medical expenses or other bills that are not covered by your insurance; whereas a reverse mortgage is usually taken out when you already own a house and want to borrow money from it so you don't have the burden of regular monthly payments.


What Are the Fees for a Reverse Mortgage?

The cash that you receive from your home it's given to you in two ways - fixed or variable. With a variable reverse mortgage, you'll get interest every year. But with a fixed reverse mortgage, you'll only get the money when you sell your home. Fees for Reverse Mortgages: In general, the fees are split into two parts:

  • Payment of Loan (Interest Charges)
  • Origination Fee - Which is 10% or Less of the Loan Amount

When Is the Best Time to Apply for a Reverse Mortgage?

There are no certain answers to this as every individual’s situation is drastically different. Generally speaking, the best time to apply for a reverse mortgage is when you are already retired, working and have a mortgage, home equity line of credit, or other debt that you can refinance. In these difficult financial times, many people are looking to get out of their mortgage and lower their monthly payments for a higher cash influx. It's never too late to apply as long as you’re over the minimum age requirement of 62. A reverse mortgage is a loan that allows homeowners to borrow against their property and use the loan proceeds as cash. You can borrow up to 90% of the value of your home, or less if you have less than 20% equity.

A reverse mortgage is an option that allows older homeowners who are living in their homes to tap into the equity of their homes without selling it or moving into a retirement facility. You can use your home equity to retire debt or to pay for medical care and other living expenses. If you are interested in learning more about a reverse mortgage, contact our expert mortgage lenders today at Reverse Mortgage CA.

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