I am in North Carolina, and I’m not on the house deed. We applied for a reverse mortgage, signed the papers and appraisal was done today. I question them about me not being on the house deed and I was told it was not necessary. Is this true? If it is, where do I stand?

I hate hearing stories like this. I believe you should be given all the information and then allowed to make an informed decision, not just told that it’s not necessary.  It may or may not be necessary, depending on your circumstances.

Let me explain.

Firstly, if you are not old enough to be a borrower on the loan, you are considered a non-borrowing spouse no matter what.

Whether you are on the title or not, the borrower is married, so your information is considered.  As long as you are living in the property when the loan is originated and closed, you are considered an eligible non-borrowing spouse at that time.

An eligible non-borrowing spouse can become ineligible over time, and I will explain how that happens.  However, an ineligible spouse can never become eligible later.

Understanding Spousal Eligibility for Reverse Mortgages

If you are not living in the home at the time the loan is completed.  From what you have said, I assume you are an eligible non-borrowing spouse.  What you did not tell me is if you are 62 years of age or older.

If you are 62 years of age or older, there is no reason whatsoever that they do not add you to the title before starting the loan and make you a co-borrower so that if anything ever happens to your husband, you have full access to the reverse mortgage and the right to remain in the property after he passes.

As an eligible non-borrowing spouse, you can remain in the property after he passes if you have not become ineligible.  However, you must take title to the property within 60 days after the borrower passes and continue to meet the reverse mortgage provisions of the loan (pay the taxes and insurance on time and maintain the home reasonably).

To remain eligible, you must continue living in the property, you cannot move out and then move back in at some point later.  And here is a very important distinction: as an eligible non-borrowing spouse, you cannot access the reverse mortgage itself.

If you are not yet 62 years of age, you cannot be a co-borrower and cannot access the loan. This means that if your spouse passes away while there is still a balance available on the line of credit, you cannot access those funds.

If you are 62 or over and they put you on title now, if anything happens to your spouse, you have full access to the loan proceeds and are a co-borrower.

Enhancing Spousal Rights: The Impact of HUD’s Final Rule

And since HUD issued its Final Rule in September 2017, there is no reason not to allow you to be on title at this time (unless you and your spouse wish it to be that way).

In the past, individuals who were not eligible for the loan could also not be on title when the loan closed, but this is no longer the case.

Unless there is some reason you and your spouse wish you not to be on the title, I would recommend that you be added to the title now so that if anything happens, you do not have to go through probate or worry about any other delays to change the title at that time.

In short, unless there is some reason you and your spouse do not want you on the title currently, there is no reason whatsoever to leave you off and plenty of good reasons to add you now, whether you are 62 years of age or not.

Leaving you off of the title may not cause you any trouble, especially if you are using all the funds to buy a new home or to pay off an existing mortgage (in which case there will be no funds available later anyway), but it would limit you on the availability to funds if your spouse passes with available funds on the line.

Putting you on title now would also mean that you have to worry about changing the title within a relatively short time frame later if anything happens to your spouse, and my advice is always that it is easier to do it now, while you are both here and healthy than later at a very difficult time in your life just after you have lost a spouse.

ARLO recommends these helpful resources: 

• Options When a Spouse Dies with a Reverse Mortgage
• “My wife is Under 62, can I still do a reverse mortgage?”
• Reverse Mortgage Attorney Asks: Laws of Survivorship