In today’s housing market home values have been on the rise, and expectations are they may even continue to rise in 2021.1 Borrowers who have an existing reverse mortgage may find that their home value has also increased. With rising home values and the increased Max Claim Amount (MCA) for HECMs in 2021, it may be the right time to consider refinancing your Home Equity Conversion Mortgage loan (HECM). While it doesn’t always make sense to refinance, below are some indicators refinancing may be a good idea.
Increased Max Claim Amount
Beginning January 1, 2021,2 the MCA will increase from $765,600 to $822,375. The increased MCA will allow borrowers, with higher home values, to access more equity than what was previously allowed in 2020. The increase may help borrowers have access to more funds by refinancing their existing reverse mortgage, while still having an FHA-insured loan.
Higher Home Values
With home values continuing to rise, senior borrowers may be wondering how they can access the additional equity in their homes. By refinancing their HECM loan, they may be able to gain access to funds that weren’t available with their current loan due to the home gaining equity.
Some borrowers have seen their home values climb sharply, even above the new $822,375 MCA limit. For these homes, a HECM to Jumbo refinance may be a better refinance option. Depending on the lender, a jumbo reverse mortgage can allow senior borrowers access to a portion of their home’s equity up to $4,000,000. 
Lower Interest Rates
With HECM rates continuing to trend lower3 it may be a great time to refinance your existing reverse mortgage. If you currently have an adjustable-rate mortgage, you may want to consider a fixed-rate loan. Furthermore, if you are in a fixed-rate mortgage, you may be able to take advantage of lower interest rates with the refinancing of your current HECM loan.
To see if refinancing your existing reverse mortgage may benefit you, call 800.976.6211 to speak with a licensed loan advisor.
Disclosures:
2 Applies only to loans with case numbers assigned on or after January 1, 2021.
3 https://www.hsh.com/reverse-mortgage/reverse-mortgage-rates.html