I am 68 years of age, married my wife about three years age. I had my house before I got married. My wife is 54, can I still do a reverse mortgage? And if so how will it affect her? Her name is not on the deed. -Gregory N.
Firstly, let me say that as of August 4, 2014, this is completely different than it used to be and so anything you read that is dated prior to this time is no longer applicable. The internet is a wonderful place to get information, but unfortunately, old information is often still available in archives that are still available on searches and this is one of those areas that can be confusing if you compare old information to the current without realizing it’s changed.
Prior to August 4th of this year, borrowers over 62 with spouses who were not yet 62 years of age could obtain a reverse mortgage and the non-borrowing spouse was not on the title and therefore not considered in the calculations.
Change in Spousal Rights
The loan was called due and payable when the older spouse permanently left the home giving the non-borrowing spouse full rights to inherit the property and dispose of the property or refinance it however they saw fit, but if they were unable to refinance the property at that time, it forced them to sell the home.
Depending on the amount of equity left at that time, it could be a doubly disastrous event, losing a spouse and having to move out of the family home because they could not qualify for a new loan in their own name. However, that has now changed. As of August 4, 2014, borrowers with spouses not yet 62 can now do a reverse mortgage without their spouse under different rules and under different guidelines.
It still works the same way, your spouse would not be on title to the property at the time you close the loan and would still be a “non-borrowing spouse”. She would not have the same rights on the reverse mortgage that you do in that if you were to pass while there was still money available on the line of credit, she would not be able to access that existing line.
However, the biggest differences are that the spouse of the borrower now has 90 days to put the property into her name and then can stay in the home for the rest of her life as well. This is a protection for the spouse that was not previously available. The spouse can apply for her own reverse mortgage when she reaches the age of 62 and any funds available would then be accessible to the spouse under their own program.
In order to be eligible to stay in the home, the spouse must live continuously in the home and as previously stated, transfer the property into her name within 90 days (which means that they must be your only heir to the property). One thing that borrowers must realize is that since a reverse mortgage allows them to live in the home for the rest of their lives without having to make a payment, bringing spouses under the age of 62 into the equation will also lower the amount of funds available to the borrower under the program.
But this will allow you to get a reverse mortgage and will protect your 54-year-old spouse as well.