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5 facts about refinancing a reverse mortgage loan

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Terms can vary widely – really widely
Terms can vary widely – really widely | Rekha Garton/Getty Images

Terms can vary widely – really widely

As you shop around for a reverse mortgage loan refinance, you'll notice that terms and fees can vary widely.

It's important to understand exactly why you're seeing those differences. Does one lender really have lower fees, or is the company rolling some of the costs into your loan balance?

"Some lenders will cut the upfront costs in return for a higher interest rate," says Steven Sass, an economist with the Center for Retirement Research at Boston College.

An example: If you'll take a higher rate, your lender might be willing to waive its origination (processing) fee, says Mary Jo Lafaye, a reverse mortgage loans specialist with Retirement Funding Solutions in San Diego.

If your refi involves switching to a reverse mortgage line of credit, note that the credit line will grow if interest rates rise, and those adjustments can come annually or even monthly.

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