Many seniors who already have reverse mortgages frequently say, “I already have a reverse mortgage, I do not need a refinance.” However, if these seniors truly understood what they are missing out on they would never say that. There are FIVE (5) major reasons to consider refinancing your reverse mortgage:
- Your reverse mortgage originated prior to August 4, 2014
- Your age has increased
- Your home value has increased
- Your spouse is not on the reverse mortgage note
- Closing costs for HECM to HECM refinances are much lower (and in fact, may be reduced and/or eliminated altogether) than when you obtained your current reverse mortgage
I will evaluate your situation for FREE. I cannot guarantee that you will qualify for more benefits, however, if you do not have your reverse mortgage evaluated you could be leaving money on the table.
Any one of these 4 reasons alone could positively affect a refinance of your reverse mortgage. However, when you consider the benefits of all 4 in total, the result is an extremely advantageous opportunity for you to really MAXIMIZE the benefits that a reverse mortgage provides. Let me tell you why the 4 reasons listed above matter so much.
Your reverse mortgage originated prior to August 4, 2014
On August 4, 2014 new principal limit factors went into effect. The amount of money that you are allowed to borrower on a reverse mortgage is based upon the appraised value of your home and a factor based on your age. For example, if you are 83 years old and were originating your reverse mortgage PRIOR to August 4, 2014 your principal limit would be determined by multiplying the appraised value of your home by times 62.5%. Whereas if you are 83 years old and originate your reverse mortgage today your principal limit would be determined by multiplying the fair market value of your home by 68.2%. As you can see, you could borrow 5.7% more than you could prior to August 4, 2014.
Your age has increased
As I mentioned, age is an important factor in determining reverse mortgages. The older you get the more money you can borrow. For example, if you were 83 when you originated your reverse mortgage (and the origination took place before August 4, 2014) your age factor was 62.5%. If 3 years have passed and you are now 86, your new age factor is 70.9%. Thus your new principal limit would be 8.4% higher than it was when you received your current reverse mortgage.
Your home value has increased
Perhaps the biggest reason that you should consider a reverse mortgage refinance is that your house value might have increased significantly since you obtained your current reverse mortgage. The Greater San Diego Association of REALTORS® states that as of March 2016 the median sales price of homes in San Diego was $551,000. In March of 2012, the median sales price was around $365,000. In April of 2013 the median sales price was $450k. As you can see, if you obtained your reverse mortgage in 2012 or 2013 your reverse mortgage benefits were determined on a MUCH LOWER value than what your home would be appraised for in 2016.
Closing costs for HECM to HECM refinances are much lower (and in fact, may be reduced and/or eliminated altogether) than when you obtained your current reverse mortgage
One of the major costs of a reverse mortgage is the upfront Mortgage Insurance Premium (“MIP”). When you refinance a reverse mortgage to another reverse mortgage you are given credit for the MIP you paid in your first refinance and only have to pay the difference which significantly reduces your closing costs. There are other ways to potentially reduce your closing costs and it is possible that I will be able to provide you with a credit to reduce or, in some cases, eliminate your costs altogether (Contact My Office for Details).
As you can see, you have nothing to lose by checking to see if you can squeeze more benefits out of your reverse mortgage. All I need to evaluate your situation is a copy of your most recent mortgage statement and the date of births for anyone on the loan.
If you are interested in having your current reverse mortgage evaluated to see if there is a way to maximize your reverse mortgage benefits, please call me at 888-242-2272 or 760-692-5950. For more information about me or Frontier Loan Group, Inc. please visit www.FrontierLoanGroup.com or https://www.facebook.com/FrontierLoanGroupInc/.
Frontier Loan Group, Inc. CA BRE#01449152 NMLS#345305
Michael Gaddis, J.D. CA BRE#01433800 NMLS#280011