If you are a retired senior or planning retirement, you should evaluate your home mortgage and any other debt you have. You may find that refinancing a home mortgage better fits your current and future retirement financial planning needs.

If you refinance home mortgage loans you can:

Lower payments: Refinancing can lower your monthly payments. This can result from choosing a lower interest rate or changing the length of your home mortgage loan term – or a combination of both.

Save money over time: If you lower your home mortgage interest rate, you can lower your interest payments and save money over time.

Generate cash: Cash out some of your home equity to generate upfront cash to pay off other higher interest debt or for other purposes.

To be eligible for the FHA HECM, your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible. The borrower must also have the financial resources to pay ongoing property charges including taxes and insurance. You are also required to receive consumer information free or at very low cost from a HECM counselor prior to obtaining the loan.

Yes/Sorta. There are 3 types of reverse mortgage, however, the vast majority of reverse mortgages today are part of the government-sponsored Home Equity Conversion Mortgage (HECM) program and are insured by the Federal Housing Administration (FHA). If you apply for a HECM loan, you can choose from the following options:

1. Payment of loan proceeds. You can receive loan money as a line of credit, monthly installment, a combination of these, or a lump sum.

2. Interest rate. You can choose between a fixed interest rate and an adjustable interest rate. Fixed interest rates are only available with the lump-sum payment option.

*Currently, HECMs make up most reverse mortgages offered in America. HECMs come with rules and regulations that include a requirement that the borrower receive third-party counseling.

Non-HECM Reverse Mortgages

Single-purpose reverse mortgages are also offered by some state and local governments and non-profit organizations. These are used only for the purpose specified by the lender (for example home repairs or property taxes). They may only be available in some areas for homeowners with low to moderate income. These non-HECM reverse mortgages are not federally insured.

Proprietary Reverse Mortgages

Some lenders also offer proprietary reverse mortgages, which are not federally insured. These are typically designed for borrowers with higher home values. Proprietary reverse mortgages are privately insured by the mortgage companies that offer them. They are not subject to all the same regulations as HECMs, but as a standard best practice, most companies that offer proprietary reverse mortgages emulate the same consumer protections that are found in the HECM program, including mandatory counseling.

Restructuring your debt load to pay off your car loan with mortgage debt can make sense if: (1) you can use the mortgage interest deduction on your taxes; (2) the after-tax rate on the mortgage loan is less than the interest rate on the car loan; (3) there isn't a prepayment penalty on the car loan; and (4) you have sufficient equity in your home that borrowing the additional $27,000 won't cause you to pay private mortgage insurance on the mortgage debt.

There are some drawbacks. Paying off your car over 15 to 30 years will negate any savings from a lower interest rate, not to mention the debt hangover you'll have when you go to buy your next car and you're still paying off the old one.

Both auto loans and car loans are secured loans. If you don't make your car payment, the lender can have your car repossessed, but if you don't make your mortgage payments the lender can foreclose on your home.

When deliberating about whether to take this step, look at the refinancing as a stand-alone decision. Does it make sense to refinance to capture an interest rate 1.25 percent lower than your current mortgage? It may not if you only plan on being in the house for a few years and closing costs are expensive.

Optavise’s refinancing calculator will help you determine how long it will take you to recoup your closing costs from the lower monthly mortgage payment.

The annual percentage rate adjusts the mortgage interest rate to reflect estimated closing costs, including points paid at closing and mortgage insurance.

The Truth in Lending Act requires lenders to provide the APR when advertising a mortgage loan and provide prospective borrowers with the loan's APR upon request. APRs aren't perfect, since closing costs are estimated and the lender can round off by up to a quarter-percent.

In general, neither the lender nor anyone else may charge you a fee until you have received this information. The Federal Trade Commission has a mortgage shopping work sheet that can help you lay out the costs associated with several loans and identify the loan that is best for you.

Optavise also provides you with an estimate of a loan's APR when you search for mortgage loan rates.

With so much refinancing taking place, you need to have confidence that your lender will be able to complete your loan origination in a timely and efficient manner. Ask the lender