mortgage

How reverse mortgage impacts remarriage

Don TaylorDear Senior Living Adviser,
I have a reverse mortgage on my home. I got this loan about four years ago. My husband passed away about eight years ago, so the loan is only in my name. I am considering getting remarried and checked with the bank that has my mortgage. They said that if I were to get married, I would be unable to add my new husband to my mortgage/deed, and they do not refinance reverse mortgages.

Any suggestions? Thanks.
-- Nina Nuptials

Dear Nina,
It's complicated. The U.S. Department of Housing and Urban Development, or HUD, is being forced to deal with the topic of non-borrowing spouses when it comes to a married couple that only names one person on the loan/deed at closing on a home equity conversion mortgage, or HECM.

Senior couple standing outside house © Monkey Business Images/Shutterstock.com

But to my knowledge, it doesn't have to consider the possibility of the borrower remarrying after the reverse mortgage loan has closed. If you die first, your husband would have to either move out or pay back the loan. The loan repayment should be the lesser of the unpaid mortgage balance or 95 percent of the home's appraised value.

There are a lot of moving parts. I'm presuming from your letter that if you do remarry, your new spouse will move in with you. If you moved out, that could trigger the reverse mortgage becoming due and payable.

Just because your lender won't refinance doesn't mean you can't refinance your reverse mortgage and put your new husband on the deed and the loan. The problem here is in paying up for a second round of closing costs on the refinancing. The good news is that closing costs are less than they used to be. The bad news is that the amount you can borrow from your home with a reverse mortgage has also gone down.

There are insurance solutions to the problem, but they might be more expensive than refinancing. You can buy an insurance policy with you as the insured and your husband as the beneficiary, with a death benefit large enough to cover paying off the mortgage, which you could will to him should you predecease him. Your attorney and insurance agent can discuss the pros and cons of this option with you.

I'm dismissing the option of him getting a conventional mortgage at the time of your passing to pay off your reverse mortgage. I'm assuming that the payments would put too great a strain on his retirement income. If that's not the case, he could consider that option.

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