Questions

Will My Spouse Still Be Able To Live in the Home?

Answer:

Providing you still live in the home, a reverse mortgage isn’t going to change who is able to live with you.

Nearly all reverse mortgages available today are Home Equity Conversion Mortgages (HECMs). The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. Providing you still reside in the property, using a HECM won’t change who can reside with you. However, if you die or vacate the property, the people who live with you might not be able to carry on living in the house without you.

When you’re co-borrowing your HECM with a spouse (or anyone else), your co-borrower can remain in the property even though you pass away or move out of the property. If you reside with a non-borrowing spouse or partner, that person might be able to remain in the home when you die if they met the criteria under regulations established by HUD. Be aware that this benefit for non-borrowing spouses and partners isn’t going to apply if you move to a nursing home or other heath care treatment facility for more than 12 consecutive months. It also isn’t going to apply if you do not live in the house for the majority of the year for other factors.

Children, relatives, as well as other dependents that aren’t co-borrowers on the reverse mortgage loan will likely have to leave the city state home that you’ve got the reverse mortgage encumbered with.

The vast majority of consumers in city state or their heirs will likely need to sell their property in order to repay the reverse mortgage. With an FHA-insured HECM loan, in the event the loan balance higher than your house is valued at, you or your estate don’t need to pay the excess. Whenever you or your estate sell the property, the lender takes the funds from the sale as repayment on the loan, and the FHA insurance will cover any outstanding loan balance.

If you or your heirs wishes to retain the property instead of selling it, the mortgage loan will have to be paid off with another source of funds. Nevertheless, you or the heirs won’t be forced to pay more than the full loan balance or 95 percent of the house’s appraised value, whichever is less.

Get guidance

Prior to applying for any reverse mortgage loan in city, you and your spouse or partner should seek a HUD-approved counselor to assist you to evaluate if a reverse mortgage fits your needs. To talk to a HUD-approved reverse mortgage (HECM) counselor check out HUD’s counselor search page, or simply call HUD’s housing counselor referral line at (800) 569-4287.

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