Fees fo reverse mortgage refinancing

Q. About six years ago, I took out a senior citizen FHA reverse mortgage. The monthly income payments have helped me stay in my home rather than having to move to a rental apartment or one of those assisted living places. However, when I took out my reverse mortgage, my house was worth around $150,000. Today, it has skyrocketed in market value to about $400,000. Is there any way I can get a new larger reverse mortgage without having to again incur all those up-front loan fees?

Yes. FHA recently reduced its up-front streamlined mortgage insurance premium (MIP) for senior citizen reverse mortgage refinancing. Fannie Mae, the major buyer of FHA reverse mortgages in the secondary mortgage market, clarified that refinanced reverse mortgages will have a 2 percent MIP charge for only the difference between the original and the new maximum FHA claim amount.

But Fannie Mae will not buy a streamlined reverse mortgage refinance if there is any default, such as not paying the property taxes or insurance, or if repairs are not being made.

These new FHA reverse mortgage refinance rules should save you hundreds of dollars on your up-front costs. For full details, please consult your reverse mortgage lender.

Source: Bob Bruss