How to Pay Off a Mortgage and Get a New One With Low Rates

Video Transcript

"Hi, my name is Bob Dixon and I'm better known as Mr. Reverse-Mortgage. I'm a former HUD agency counselor for reversed mortgages. Now reversed mortgages are probably one of the best kept secrets for seniors if used correctly. Now the question is "how to pay off a mortgage and get a new one with low rates." It seems like a simple answer to refinance, but the reality is there's very few people that would do that because most reversed mortgages have a variable interest rate and it's tied to the one year treasury. Some are tied to the LIBOR, but it automatically adjusts the lower interest rates on almost everybody's reverse mortgage. So to refinance for a lower rate, in almost all cases, is just not going to be necessary. Now if you're one of the very few people that got a fixed rate reverse mortgage, it may pay for you to check out the other options. But I would call the company that's handling your reverse mortgage and see if you could fix, switch over to a variable interest rate or ask them what the procedure is for having that interest rate readjust. But your first source is going to the company that has your reverse mortgage right now and asking that question and then shop around to see if there's other places to go. But in most cases, this really isn't necessary. You're going to be getting whatever the lowest rate is. Virtually everybody's is tied to the one year treasury bill plus the margin's spread. So it's going to be the same whether two years from now, ten years from now, you're automatically going to be getting the best possible rate if you're like most people if you're like most people with your reversed mortgage. Again my name is Bob Dixon, Mr. Reverse Mortgage. Thanks again, have a nice day."