#63 Refinancing Your Reverse Mortgage
A REVERSE MORTGAGE CAN BE BETTER THE SECOND TIME AROUND
Seven years ago, after arriving at two important decisions (retire from full-time employment and remain in your home), you took out a reverse mortgage. At the time, you used part of the loan proceeds to remodel the home to for safety and mobility needs, but have not needed to make withdrawals from your Line of Credit since then.
Meanwhile, you cannot not help but notice the significant appreciation in home values, as neighbors of yours have been selling their homes for tens of thousands more than they might ever have expected. Although your decision to stay put has not changed, you would like to find a way to take advantage of the increase in value of your home and also of the fact that interest rates today are lower than they were back then.
You are correct in that two factors have come into play since you took out your Home Equity Conversion Mortgage (HECM) seven years ago – lower interest rates and appreciation in home values. A HECM-to-HECM refinance might help you take advantage of both those developments. Depending on a new appraisal of the home, the combination of reduced interest rates and appreciation in the value of the home could mean a significant increase in the Line of Credit available tax-free if and when you decide to use it.
Just as Bing Crosby used to croon about love, you may well find that a reverse mortgage is lovelier the second time around!