Obtaining a Reverse Mortgage With a Non-Borrowing Spouse
Cindy, 74, and Burt, 60, needed money to pay off some of Cindy's medical bills. They owned their home, worth $350,000, free and clear, yet had no idea how to take advantage of their equity without increasing their monthly expenses. After talking to a reverse mortgage specialist, they learned that a federally insured reverse mortgage would allow them to liquidate their equity without taking on new monthly payments. The only problem, they were told, was that all homeowners must be at least 62 years of age to qualify for this type of financing. After discussing their options with their reverse mortgage specialist, they decided to remove Burt from the title so that Cindy could obtain the loan in her own name. To ensure that Burt could repay the mortgage and retain the home in the event that something was to happen to Cindy, they purchased additional life insurance through their own insurance agent.
After discussing the risks with their loan specialist and the HUD-approved counselor, they decided this was something that they wanted to do. Their loan specialist explained that they could receive the money in several ways:
| Lump Sum | $236,882 |
| Line of Credit | $188,516 |
| Monthly Advance | $1412 |
Cindy and Burt decided to take the lump sum so that they could pay off the medical bills and have some money to help with retirement. When Burt turned 62 years old, they were able to refinance the mortgage so that he was on the loan and the title and eliminate the extra insurance they had purchased.
*NOTE: THIS IS A VERY SPECIAL CIRCUMSTANCE AND SHOULD BE COMPLETELY UNDERSTOOD BEFORE ENTERING INTO A REVERSE MORTGAGE. PLEASE CONTACT YOUR LOAN SPECIALIST WITH ANY QUESTIONS.
