When you financed your reverse mortgage, you probably thought it was the last home loan you would ever have to finance.

The majority of reverse mortgage borrowers are in their early 70s. At this stage, most of us believe that we have purchased our last home. So, we take out a reverse mortgage to provide some cash flow, making the retirement years more comfortable.

And yet 40% of today’s reverse mortgages are refinances.

What’s driving them to refinance their reverse mortgage?

It turns out that there are some situations when it can definitely benefit you to take this step.

Should you refinance your reverse mortgage?

If it has been several years since you originally purchased your reverse mortgage, interest rates may have dropped. In this case, you can benefit by refinancing. It’s also worthwhile to refinance if your home’s value has appreciated in the last few years. Or you may choose to refinance your adjustable-rate to a fixed rate. In these cases, you may be leaving money on the table by not seizing this opportunity to refinance.

When making the final determination as to whether or not to refinance, consider the 5-5 rule. First, the principal amount (the amount you qualify for) should be at least five times more than the closing costs. And the proceeds of the loan should equal at least 5% of the amount you refinance.

Can you refinance your reverse mortgage?

As with any other kind of loan, you must meet certain basic requirements to be able to refinance:

• You must be at least 62 years of age.
• The home must be your primary residence.
• You have to have enough equity in the home.
• You must demonstrate financial stability, proving that you can afford ongoing property taxes, home insurance, and maintenance costs.

How do you refinance a reverse mortgage?

This process is similar to what you go through when refinancing a traditional loan.

Once you’ve determined that you are eligible for a reverse mortgage and that there is a clear benefit in doing so, you must go through the approval process with an established lender.

As with any other kind of loan, you should plan to pay some closing costs.

To learn more about refinancing your reverse mortgage, get in touch with Angella Conrard and her team of experts at C2 Reverse today.