Should You? Get More Money by Taking Your Spouse Off the Reverse Mortgage
Should You? Get More Money by Taking Your Spouse Off the Reverse Mortgage:
Decisions related to reverse mortgages can have significant implications for both you and your spouse. It’s true that the older the borrower, the more funds they may qualify for. So placing the reverse mortgage in the older spouse’s name might appear to be a good idea. But there are risks and drawbacks associated with this strategy. With the FHA insured Home Equity Conversion Mortgage, A surviving non-borrowing spouse may not withdraw any unused loan funds after the death of the borrowing spouse, while interest, FHA mortgage insurance premiums, and service fees continue to add on the unpaid principal balance. The loan also becomes due and payable. Fortunately special deferral provisions may be available for the surviving spouse, allowing him/her to remain in the home. When considering a Proprietary reverse mortgage, the NON-BORROWING spouse is required to give up all rights to the property. As a result, the note becomes due and payable upon death of the borrowing spouse and the nonborrowing spouse may be required to vacate the home . Every client’s needs are different but it’s crucial to carefully consider the pros and cons of strategies that could put a nonborrowing spouse at risk.