Tag: refinance a reverse mortgage

In March of 2019, President Trump issued a Memorandum to reform some aspects of the government’s Federal Housing programs, including the FHA-insured HECM program. For Oregon seniors who currently hold or are considering a reverse mortgage, these proposed changes could have a significant impact on their financial future. One of the most drastic changes proposed is the removal of the ability to refinance a reverse mortgage. Currently, borrowers who have a reverse mortgage can refinance to access more equity if they are eligible, but that might not be the case for long.

Changes are made to the HECM program often to make it a stronger, safer program for the borrower. The government hopes these changes will strengthen the longevity of the program so it will be available to many more seniors for years to come. However, that doesn’t make the transition any less urgent for those who stand to benefit from acting now.

What Changes Are Being Proposed?

The changes that are being proposed for the HECM program are as follows:

• Reform the loan limit structure to reflect variations in local housing markets and regional economies across the U.S. instead of the current national loan limit set to the level of high-cost markets in the forward program.
• Set a separate capital reserve ratio and remove HECMs from the MMIF.
• Eliminate HECM-to-HECM refinances.

Why This Matters for Oregon Seniors

These changes could drastically impact many Oregon seniors who may have taken out a reverse mortgage in Oregon when their property values were lower or interest rates were higher. Oregon’s real estate market has seen remarkable appreciation in recent years, particularly in cities like Portland, Bend, and Eugene. The equity in many seniors’ homes may have risen drastically over the years, and interest rates are very low right now.

Not only that, but the amount a borrower may qualify for under a reverse mortgage for seniors is partially dependent upon age, meaning they will qualify for a higher percentage of equity as they grow older. Someone who took out a reverse mortgage in Oregon in the past should seriously consider a refinance as soon as possible to boost their financial portfolio and take advantage of current conditions before the window closes.

A qualified reverse mortgage specialist can walk you through your specific situation, review your current loan terms, and help you understand whether a refinance makes sense given today’s rates and your home’s current value. This kind of personalized guidance is invaluable when navigating a program as nuanced as the HECM.

Don’t Wait, The Time to Act Is Now

For seniors who have seen their home values climb over the years, a HomeSafe reverse mortgage or HECM refinance could unlock tens of thousands of dollars in additional equity. That money can be used to supplement retirement income, cover healthcare costs, pay off remaining debts, or simply provide a greater financial cushion.

If the proposed elimination of HECM-to-HECM refinances moves forward, that opportunity disappears. Working with an experienced reverse mortgage specialist now gives you the best chance to evaluate your options and act before any regulatory changes take effect.

If you or your clients have a reverse mortgage in Oregon, call us today to check if a refinance may be an option before it’s too late. 503-427-1667 or click here to contact us online.

Frequently Asked Questions

1. What is a reverse mortgage and who qualifies?

A reverse mortgage for seniors allows homeowners aged 62 and older to convert a portion of their home equity into tax-free loan proceeds, without having to make monthly mortgage payments. To qualify, the home must be your primary residence and you must meet FHA guidelines.

2. Can I still get a reverse mortgage in Oregon if these changes pass?

Yes. The proposed changes target the refinancing of existing reverse mortgages, not new originations. However, speaking with a reverse mortgage specialist sooner rather than later is always advisable.

3. What is a HomeSafe reverse mortgage?

A HomeSafe reverse mortgage is a proprietary (non-FHA) reverse mortgage product designed for higher-value homes. It can allow eligible borrowers to access more equity than a standard HECM in some cases.

4. How do I know if refinancing my reverse mortgage makes sense?

If your home’s value has increased significantly, if you are older than when you originally took out your loan, or if interest rates are more favorable now, refinancing could make strong financial sense. A reverse mortgage specialist can run a no-obligation comparison for you.

5. How long does the reverse mortgage refinance process take in Oregon?

The process typically takes between 30 and 45 days from application to closing, though timelines can vary. Starting the process now, before any regulatory changes take hold, gives you the best chance of completing it under current program rules.