General: Marriage to Younger Spouse Limits Reverse Mortgage

Reverse mortgage elibibility is based on the age of the youngest individual who holds title. So if you have married a much younger spouse, this could significantly affect the amount of money you will recieve from the reverse mortgage.

The following question and answer from Robert J. Bruss at www.bobbruss.com illustrates this issue:

Q: I am 78. My wife is 64. We own our home with a value of $550,000. No mortgage and no debts. We recently inquired about a senior citizen reverse mortgage and were told the most we can receive is $680 per month. The up-front fees would be about $13,000. The mortgage manager suggests we obtain a home equity loan instead. We have income of only about $60,000 per year. But we are cash poor and want to do some traveling. I know you recommend reverse mortgages. This doesn't seem like a good deal. Are we missing something?

A: The problem is you married a younger woman. You could qualify for a very generous reverse mortgage based on your age alone and the home's market value. But your young wife has a far longer life expectancy. Reverse mortgage lenders base eligibility on the age of the younger spouse who holds title. That's why the offered monthly lifetime $680 payment seems so low. The simple solution is for your wife to quitclaim her interest in the house to you. Then the reverse mortgage eligibility will be much higher, based on your age rather than hers.

Resource: Brought to you by Reverse Mortgage Guide and the Reverse Mortgage Blog.