HECM to HECM Refinance
What is an HECM to HECM Refinance Loan?
For seniors in Utah, a HECM Reverse Mortgage is a great way to enjoy all the benefits of having no mortgage payments. With a HECM the equity of the home built up over the years makes the future payments, allowing the owner to enjoy their retirement with increased cash flow. With a Reverse Mortgage, the borrower is only responsible for typical property expenses such as taxes, insurance, and HOA costs.
A HECM to HECM refinance is a simple reset of an existing reverse mortgage where the previous Reverse Mortgage is paid off and a new Reverse Mortgage takes its place. This becomes a valuable tool when home values rise dramatically giving the homeowner access to additional equity, there is a need to change the interest rate, or the homeowner would like to add another person to the mortgage such as a new spouse or qualifying family member.
Who is eligible for an HECM to HECM refinance?
In Utah, Reverse Mortgages or Home Equity Conversion Mortgages (HECM) are designed for homeowners 62 years of age and older. Reverse mortgages have a minimum equity requirement which is determined by the age of the youngest borrower. Utah’s HECM requirements such as income and credit are far more lenient than traditional forward mortgages. In order to receive a HECM to HECM refinance in Utah, borrowers must live on the property as their primary place of residence and of course currently have a Reverse Mortgage in place.
What are the benefits of this loan?
- Access additional equity gained through appreciation to consolidate Debts, establish a line of credit, or pull out cash
- Add additional borrowers to the Reverse Mortgage
- Make changes to the interest rate such as going from an adjustable to a fixed rate or locking in a lower rate
- Retain all benefits of previous Reverse Mortgage
- Establish monthly payments from the bank to supplement a fixed income
- Reduced income qualifying requirements
- Minimal Credit requirements
- No Mortgage payments as long as the homeowner lives in the home