mortgage

Refi reverse mortgage, keep wife in house

Don TaylorDear Dr. Don,
I got a reverse mortgage on my home, but my wife was not on the loan. I was hoping to add her name through refinancing the reverse mortgage. But, I've called some places and have been told it cannot be done.

The original attorney on the deal made a quick deed, and I don't know what to do. My wife has nowhere else to live if I pass away.

Thanks,
-- Richard Redux

Dear Richard,
Putting your bride on the deed doesn't put her on the mortgage loan. With a reverse mortgage, the loan becomes due when the last person on the loan dies or stops living in the house.

The good news is that reverse mortgages can be refinanced. It can be expensive and may not make financial sense.

The first thing that has to happen with the refinancing is to pay off the existing loan balance, which includes the interest expense to date.

But your goal isn't to find additional funds; it is to get your wife's name on the loan. I'd suggest you look into refinancing with the Federal Housing Administration's Home Equity Conversion Mortgage program.

Another possibility involves life insurance, which could help accomplish your goals. A life insurance policy that lists you as the insured and your wife listed as the beneficiary could pay off the reverse mortgage if you die.

It won't be cheap, but neither are closing costs on a new reverse mortgage.

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