Very often we will see two clients that wish to apply for a Reverse Mortgage but one of them will not be over the age of 62. I would like to address this issue and explain how a Reverse Mortgage can still be obtained in this situation and also what the ramifications of that decision would be.
Let’s say for purposes of this article that a married couple is comprised of a 65 year old husband and a 60 year old wife and they are both on title to their home. An application would be taken in just the husband’s name and the wife would be listed as an NBS (Non-Borrowing Spouse). Both the husband and the wife would need to attend a HECM Counseling session. The husband would sign and date the application and the wife would sign and date her NBS disclosures. Both the husband and wife would sign and date the counseling certificate. During the loan process the wife would sign a document (Quit Claim Deed) to remove herself from title of the property. The loan would close in only the husband’s name and would comply with all FHA guidelines.
In the above example the couple could still get a Reverse Mortgage even though the wife is not of qualifying age.
However, the example above also comes with some risk. If the husband passes away and the wife cannot afford to refinance the property and pay monthly payments she may have to sell the property and move out. If the husband passes away and the couple does not live in a community property state the wife may have to deal with title and ownership issues.
Overall, it’s important the couple contact an attorney or other professional in their state to discuss the ramifications of taking one spouse off title. It can never hurt to get a professional opinion when dealing with your home.