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to any non borrowing or potential non borrowing spouses on reverse mortgages
there has been a recent change in the program that allows spouses not 62 to remain in the home for life when the older reverse mortgage borrower passes away. they would still need to maintain the home, pay property taxes and homeowners insurance- but would not have to make mortgage payments. check with the FHA to find out exactly how it works- but i think the monthly payments (or access to the credit line) stop on death of the actual older borrower- but the younger person would not have to pay off the mortgage, sell, or leave the home.
this is only for new reverse mortgage originations and the numbers are still based off the younger (non borrowing) persons age. so if you're 70 and your spouse is 25- god bless ya- but you'd never want to do this. however in an emergency- with a spouse not too far off from 62- or as part of an informed strategy- it's peace of mind and protection for the younger person. if you are single and take out a new reverse mortgage, then get married to a person under 62, they are not protected under this new rule.
To FloridaHappy- since you did a reverse for purchase, unless the property has significantly gone up in value you would not qualify for a reverse mortgage refinance under the new guidelines without paying down some of the existing mortgage balance. however if you hope to live in the home long term (even if your spouse passed) and you have the means, you might want to look into how much it would cost you to refi to protect yourself under the new program.
another option if you're not 62 and your spouse has a reverse mortgage is to make periodic payments to bring the reverse mortgage balance down to a point where you qualify to refinance under the new guidelines.
a girlfriend of mine was 58 last year when her older husband did a reverse mortgage to save their home because they couldn't keep up with the mortgage payments (due to a temporary loss of income). she works and pays the interest every month on the reverse mortgage. the plan is by preventing the mortgage balance from increasing, along with future home appreciation, when she's 62 she'll qualify to refinance the reverse mortgage without having to bring any money to the closing.
My mind was wondering while reading these posts. Say a 65 yr. old had a paid off 4 bedroom home, but needed income. Would there be any restrictions to him renting out two of the bedrooms to room mates while in the home with a reverse mortgage? I wouldn't think it wouldn't matter, but perhaps the bank wouldn't want the hassle of dealing with room mates if they took possession of the house.
I'm thinking 62 is too young to do an RM.
If they give you $1000 a month...on $100k that's 100 months,
it could peter out in 8 years...
If they give you $500, then in 16 years.
Better to do an RM a 70 or later....remembering you won't
be getting what you would if sold outright, of course.
Does anyone have a way to calculate what you would get or lose, say, on a paid for
$150k house? $200k house? A $250k?
If I were to take a RM on a home I already owned, I would opt for the lump sum and invest the money myself.
Location: On the "Left Coast", somewhere in "the Land of Fruits & Nuts"
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Used the lump sum to buy a "2nd home" which has become a profitable investment, and no regrets or bad experience with the reverse mortgage whatsoever. Hey, where else do you get to "re-purpose" the equity in your home, while still living there, and having no payments?!
I recall there were a couple additional issues beyond inheritance. You must maintain the house and keep insurance. Also if I remember right if you no longer LIVE in the house (because you are in a nursing facility?) then the bank gets to take it.
The bank doesn't just "get to take it". The bank doesn't own the property. The reverse mortgage would have to be paid off, or the bank would start the process to "take it". I am sure you next question is how could the poor person in the nursing home possible pay off the mortgage. Easy, they would sell the house.
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