New Protections Available to Reverse Mortgage Non-Borrowing Spouses
Making the decision to get a reverse mortgage is one that you probably entered into with plenty of research, including how this could potentially impact the non-borrowing spouse. New updates in estate planning make for bigger protections for that non-borrowing spouse when the reverse mortgage is active.
The most important component of these updates is that even if the non-borrowing spouse is not named within the loan document, that person can still stay in the home even if the borrower has to move to a care facility or passes away.
A reverse mortgage is a benefit available only to certain homeowners who are above the age of 62. Prior to 2014, if the younger spouse was under age 62 when the other spouse opened the mortgage, that younger spouse could not be listed on the mortgage. Since this was a requirement, plenty of couples left off the other spouse without realizing the long-term impacts.
Since that reverse mortgage was in the name of one spouse only, the other spouse could be left in the lurch if the borrowing spouse passed away or needed to leave the home. Technically, if that borrowing spouse passed away, the reverse mortgage company was well within their rights to reclaim the property and evict the non-borrowing spouse.
Since a reverse mortgage factors into many planning strategies for older couples, it’s important to think about how real property factors into your actual retirement plans as well as your estate.
If you need more help determining how your reverse mortgage could be impacted by long term care issues, set aside time to meet with a Virginia Beach, VA estate planning law firm.