Refinancing A Reverse Mortgage - part 1

by Bob Hartz

The reverse mortgage is primarily a resource for our senior population, and it has become a widely used financial instrument. A reverse mortgage is a loan made to someone who has a great deal of equity in their home - someone who in almost all cases has lived there a long time and is a retired American on a fixed income. It's a method of taking cash out of the home's equity via a "reverse" mortgage in which the loan company pays the homeowner instead of the other way around. When the home occupant dies or sells the property, the loan is repaid with interest.
Reverse mortgages can be paid in lump sums, in monthly installments or can be used as a line of credit. They are often used for the massive medical expenses that too many retirees encounter which are not covered by Medicare or any additional private medical insurance they may hold. Reverse mortgages may be used to pay for long term care in the case of extended illness or serious injury, to modify homes for persons with limited movement capability, or for more pleasant uses such as travel or to establish a cash reserve invested elsewhere.

Not Just a One-Time Opportunity

The FHA has monitored this market closely; to prevent abuses and to minimize those situations where older citizens are entering into loans they don't understand. One of the roles the FHA plays is in setting limits to the amount that can be loaned, limits that vary by region and are adjusted yearly.

That is one factor that may contribute to making a refinanced reverse mortgage a good idea. Generally speaking, the older you are and the more your home is worth the more you can borrow with a reverse mortgage. If you took out a reverse mortgage five years ago, the chances are excellent that the value of your home has increased by fifteen or twenty percent or perhaps more. You have also grown five years older.

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Refinancing A Reverse Mortgage

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Related Reverse Mortgage Articles: Advantages And Disadvantages Of A Reverse Mortgage Describes advantages and disadvantages of reverse mortgages. The Advantages Of Reverse Mortgages High property values and low investment returns have senior looking to use their equity to help fund their retirement. A reverse mortgage can help them. Reverse Mortgages And Government Benefits Reverse mortgages are increasing in popularity as a way to turn home equity into a liquid asset. Before you jump on a reverse mortgage, you need to understand the impact it can have on government benefits. Consider Different Reverse Mortgage Options There are many different reverse mortgage options: single purpose reverse mortgages, federally insured reverse mortgages, and proprietary (private sector) reverse mortgages. How Do You Know If You Need A Reverse Mortgage? With the growing popularity of reverse mortgages across the country, more and more seniors are asking themselves, "Do I need a Reverse Mortgage?"

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