Mortgage News for Spouses
A Reverse Mortgage is not for everyone. It is a family decision as the home is in the balance. However, if you qualify and it is the right decision for you, it is worth exploring and gaining knowledge about it. Consult with your legal & financial advisors, as well as family members. It is a tool to enable you or your loved ones to remain in their home, with income.
A spouse under 62 years of age is now protected
Beginning August 4th 2014, there were big changes in the reverse mortgage world. It used to be that if a spouse was under 62 years of age, they could not be part of the transaction. They would have been what were called a non-borrowing spouse (NBS), which meant coming off of title. There were major consequences for coming off of title. If the borrowing spouse passed away, the non-borrowing spouse was left in a position of having to pay off the reverse mortgage balance, and in many cases, they did not have a plan (life insurance, money in the bank, sufficient income or credit score needed to qualify for a loan) should this situation happen. So long story short, many lost their home.
The new rule protects the spouse under 62 as can be part of the transaction. They can continue to live in the home and not have to make mortgage payments. However, they must continue to pay their property taxes, homeowners insurance and HOA fee (if applicable) as well as keep the home in good condition. They will not have access to any of the remaining reverse mortgage proceeds (balance left in line of credit or receiving further monthly payments), but they keep a roof over their head.
The other change was an increase in proceeds.
Information Provided by: Brian Cooper/National Reverse Mortgage Specialist iReverse Home Loans, a Subsidiary of Hopkins Federal Savings Bank
Member FDIC/Equal Housing Lender/NMLS #176555 (800) 486-8786, x-704
