The amount of the origination fee that was paid while obtaining their original loan will be applied toward the origination fee for the refinanced reverse mortgage. In addition, mandatory counseling will be waived if the owner has received counseling within the last five years. HUD also will establish guidelines to help owners determine the viability of a refinancing. Higher loan limits now in effect, coupled with lower interest rates, will allow many seniors who already have reverse mortgages to refinance and obtain even more money to live on, pay medical bills or made much needed repairs to their properties. Reverse mortgages are available to individuals 62 or older who own their home.
Borrowers can use the funds anyway they wish.
Borrowers make no monthly payments on a reverse mortgage during its term. The loan becomes repayable when the borrower permanently moves out or sells the home. In addition, the repayment amount can't exceed the value of the home. Any remaining equity in the home belongs to the owner or his or her heirs. Reverse mortgages are originated largely by private lenders.