Can I get a reverse mortgage if my spouse is under 62?

Reverse mortgages are becoming a staple in long-term financial plans. Used in a comprehensive plan, reverse mortgages make retirement funds last longer. Unfortunately, there is still a lot of confusion for those couples with notable age differences. Reverse mortgages generally take place when all borrowers are over the age of 62.

Is it possible for a couple with a spouse under 62 to get a reverse mortgage loan? Is it a smart financial move in this scenario?

If you can! Make an informed decision.
The key is that everything borrowers You must be 62 or older at the time you take out the loan. The younger spouse must not have title at the time of loan closing.

Spouses under the age of 62 should have questions about this scenario. The key is to study your situation and see if going into a reverse mortgage makes financial sense. HUD has recently made policy changes to protect younger spouses.

If the other spouse dies before the younger spouse, the younger spouse can inherit the house. The reverse mortgage payment date differs during the lifetime of the younger spouse. This deferral period must be requested. There are specifics to a reverse mortgage when there is a younger spouse (under age 62). Let’s take a closer look.

The aspects
The couple must be married at the time of closing the reverse mortgage. (Common law spouses are recognized as legal in the state where the borrower lives. This applies to same-sex couples if they are recognized as legal in your state.)

The younger spouse must not hold title at the time of closing.

Reverse mortgage income is calculated on the younger spouse.

The non-borrowing spouse cannot receive any loan proceeds remaining after the death of the other spouse.

· The non-borrowing spouse must establish legal ownership of their home within 90 days of their spouse’s death to qualify for the deferment.

The non-borrowing spouse must maintain their home as their primary residence.

· The non-borrowing spouse must pay property taxes, insurance, association due, and maintain their home.

The reverse mortgage debt is only attached to the home. It is not a personal debt of the surviving spouse.

If a reverse mortgage borrower marries after a reverse mortgage has been established, the borrower will need to refinance to add the new spouse to title or to qualify for a deferred payment.

As long as they do the above, the youngest surviving spouse can continue to live in the home for life. The loan will continue to earn interest. They will not receive any more money from the proceeds of the loan. But the repayment of the loan is deferred for life. The exception is if there are repair funds on deposit. When those repairs are completed during this ‘deferral period’. Those funds are released.

When does it make sense to get a reverse mortgage with a younger spouse?
The above aspects mean that this plan may not be for everyone. So who does it make sense to and when?

This strategy may make sense for couples who want to avoid having to pay the mortgage.

The proceeds can provide a lump sum of money, regular monthly payments or act as a flexible line of credit.

It is important to create a lifetime budget. Be sure to account for any changes in income when one spouse predeceases the other. Life insurance, cash flow businesses, and having other assets can be helpful.

The surviving spouse may not want to stay in the home. The property can be sold if they would like to downsize or move in with the family.

The cash withdrawn earlier can be used to get a smaller house or condo. The guidelines require the borrower and non-borrowing spouse to participate in HUD-approved third-party counseling as a safeguard to protect consumers. This occurs before any contract is signed.

Summary
In conclusion; It is possible for couples to get a reverse mortgage, even if one spouse is under 62. It is important to look at the big picture and whether this is the optimal strategy for your situation. For many it will be the best move.

It is critical that homeowners fully understand the loan agreement. Know the rules now, make your plan.