A HECM to HECM refinance, sometimes called an H2H refinance, replaces an existing reverse mortgage with a new HECM loan. In the right situation, this may allow a homeowner to access additional available equity, adjust loan terms, or better match the reverse mortgage to current needs.

Because this is a refinance of an existing reverse mortgage, it is different from a standard HECM used to pay off a traditional forward mortgage. HUD guidelines require that the refinance provide a clear benefit to the borrower.

There are several reasons a homeowner may consider refinancing an existing HECM.

In some cases, home values may have increased, which could allow access to additional proceeds. In other cases, the homeowner may want to change loan features, review current interest-rate options, or update the structure of the reverse mortgage based on a change in personal circumstances.

A refinance may also be worth exploring when a borrower wants to review whether a spouse or family-related planning issue should be addressed more carefully through a new loan structure, where program guidelines allow.

• The home has increased in value
• The borrower may qualify for more available funds
• The borrower wants to review updated loan terms or structures
• A change in family or household circumstances makes a review worthwhile
• The current reverse mortgage was opened years ago and the homeowner wants to compare it to today’s options

Not every HECM refinance is beneficial. Existing reverse mortgages often have features that continue to provide value over time, including available borrowing capacity that may grow under certain loan structures. For that reason, a refinance should be evaluated carefully to determine whether the benefits outweigh the costs and whether it truly improves the borrower’s position.

At SoCal Reverse Mortgage, we review the details of the current loan, the property, and the homeowner’s goals to help determine whether a refinance is worth considering.

In some refinance situations, the borrower may receive a credit related to the Initial Mortgage Insurance Premium paid on the previous HECM transaction. This can help reduce the cost of the new loan, depending on the circumstances of the refinance.

A HECM to HECM refinance is not something to do automatically, but in the right situation it can be a valuable way to improve access to equity or update an older reverse mortgage. The key is making sure the refinance provides a real benefit based on the homeowner’s current needs.