Reasons to Refinance Your Reverse Mortgage
San Francisco Examiner, October 21st, 2009
A government-issued reverse mortgage, or Home Equity Conversion
Mortgage (HECM), is a great way to provide a more solid financial
future for yourself. Sometimes, though, even better deals can be made
possible if you refinance it when economic times become better than
they were when you originally closed it. Here are some reasons why you
may want to refinance your HECM with a newer HECM.
Lending Limits Increase
One thing that can make refinancing a reverse home mortgage
a good deal is if the lending limits in your area have increased. If
you have had your reverse mortage for a couple of years or longer, then
it is quite possible that the current lending limits could enable you
to receive a lot more money than you had before.
About a year ago, the lending limit was raised from $417,000 to
$625,500. This meant that whatever your home's value was, you could not
have received more than $417,000 for it. Now that it is raised - but
only through January 1, 2010, you may be entitled to much larger
amounts if your home has a greater value.
Local areas have limits, too, and this figure could have been changed.
You would have to check to see if this has happened, but it is quite
possible when the economy improves. When it does get raised, it means
that you become eligible for increased amounts in a new HECM.
Interest Rates Get Better
Interest rates are always a concern with any kind of loan - even with a
reverse mortgage loan. The higher your interest is, the more that your
balance will be eaten away - reducing it even faster. When the interest
rates on a reverse mortgage decrease, it enables you to have a cash
flow even longer, or possibly even a larger one. A decrease in interest
rates may even enable you to pass some (or more) of it on to your
heirs.
Read more of this article.About Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
Professional Financial Advisors: Find out what a financial advisor can do for you at NewRetirement.com.