According to an article published by Reverse Mortgage Daily, at an interest rate of 6% borrowers who are 78 and older will potentially have access to greater principal limits than before.This change means more money for older borrowers and a greater chance of a HECM-to-HECM Refinance for borrowers who obtained a reverse mortgage before the changes were announced. While borrower(s) must wait at least 6 months from the closing date of their reverse mortgage in order to be eligible for a refinance, NRMLA once again stresses the importance of maintaining ethical values while speaking with potential clients about the possibility of a HECM-to-HECM Refinance. Specfically, NRMLA states that all NRMLA members: “Need to assure that the loan products it offers to consumers provide them a ‘bona fide advantage.'” In addition, NRMLA’s ethics guidance prohibits loan originators from “steering consumers to loan products that may not be in the consumer’s best interest.”
In short, just because a HECM-to-HECM refinance can take place, doesn’t mean it always should take place.Situations such as adding a non-borrowing spouse, a rise in home value or, in this case, a higher principal limit based on age, may be prime conditions for a homeowner to consider a refinance. However, each situation is different and should be analyzed individually as there may be other factors involved.
If a borrower is able to do a refinance, an added benefit is credits toward a lot of discounted fees.As with any importance financial decision, however, there should be steps taken in order to determine the correct course of action.
As a member of NRMLA and a Certified Reverse Mortgage Professional, I uphold the highest ethical standards in any given situation.Interested in a reverse mortgage or simply want more information? Give PS Financial Services a call at (888) 845-6630 or via email at info@ReverseMortgage.com. We don’t pressure those who inquire. We are simply here to help.