A Reverse mortgage loan could help you extend the life of your financial plan in retirement and help to give you more financial security, but what if you or your spouse is a non-borrower?
If a spouse is younger than 62, they will not qualify as a borrower on a Reverse Mortgage loan in Memphis, but may still be included on the loan as a non-borrowing spouse.
Beginning in 2014, rules on reverse mortgages went into effect that allow the non-borrowing spouse to stay in their home if the borrower passes away first. All without the risk of foreclosure if they continue to pay taxes, insurance, and continue to keep the home in good repair.
Requirements to qualify as a non-borrowing spouse:
- Be legally married at the time of application for the reverse mortgage (to the borrower) and remain married throughout the loan
- Occupy the property as your principal residence (different rules may apply if you don’t live there)
- Still be married and live in the property at the time of death of the borrower
When the last surviving borrower passes away, the loan goes into a “deferred” status. During this process, any remaining funds in the Reverse Mortgage Loan (HECM) are frozen and cannot be used, however the non-borrowing spouse will NOT be required to make payments on the loan. The lender will also not try to collect full payment on the loan if the following requirements are met:
- the remaining spouse has been listed on the loan as the NBS since the beginning of the loan
- the property continues to be the (NBS) spouse’s primary residence
- the spouse does not permanently leave the residence or does not remain outside of the residence in a healthcare facility for greater than twelve months
- the spouse gets on title or shows that he or she has a legal right to reside in the property within ninety days* of the borrower’s passing
- all requirements such as taxes, insurance, and maintenance expenses are kept up
There are different types of Reverse mortgage loans in Memphis and the age of the Non-borrowing spouse could be a factor in determining when to get a Reverse Mortgage. If the Non-borrowing spouse is a lot younger than the other, the age difference could be a factor in the proceeds you could receive with your loan. Since everyone’s financial situation and goals are different, Chris Brundige, with FirstBank Reverse Mortgage, recommends being upfront about them with your loan officer. Chrisalso stated, “Your loan officer can give you the education to help you better determine if doing a reverse mortgage with a non-borrowing spouse is appropriate for your specific situation or whether it would be best to wait until the non-borrowing spouse is 62”.
FirstBank requires both borrowers to attend Reverse Mortgage counseling prior to acquiring a HECM. If you are interested in the program and would like to learn more about how FirstBank’s Reverse Mortgage loan or Reverse Mortgage Line of Credit in Memphis could help extend the life of your retirement plan or take advantage of your largest asset, Chris Brundige with FirstBank, a licensed Reverse Mortgage lender in Memphis would be glad to help you. Please call Chris Brundige at 901-472-1301 to get started or visit http://reversemortgagelenderintn.com to use our free calculator.
*Homeowner is still responsible for paying property taxes, insurance, and property maintenance.