The short answer is that this means a reverse mortgage is not available on the property. Both husband and wife must be 62 or over. This is only true, of course, if the property is titled in both names, typically called a joint tenancy when between a husband and wife.

With a reverse mortgage, the loan comes due at the death or permanent move of the person whose name is on the reverse mortgage. The reverse mortgage lender, at this point, will want the reverse mortgage to be paid off. Therefore, the living (or still living there) spouse will be forced to come up with sufficient funds to pay off the reverse mortgage. This can obviously be quite daunting.

However, a reverse mortgage coming due does not mean the house belongs to the bank or to the reverse mortgage lender. The house merely secures the loan. The lender just wants the money. In fact, they probably don’t want the house anymore than you want to give them the house.

So ultimately, the person who remains in the house will need to have sufficient funds to pay off the reverse mortgage, or will need to move out.

First, “the move out.” When the spouse on the reverse mortgage dies or moves to a nursing home, it may in fact be a better option for the other spouse to relocate. The house may be too big, the responsibilities to great, etc.

Second, “the payoff.” Life insurance and/or long-term care insurance may be the only possibilities. A life insurance policy can be purchased to provide sufficient funds to satisfy the reverse mortgage. In fact, the life insurance can be put in a trust to avoid the probate process, thereby making the funds immediately available for use to take care off the reverse mortgage. The long-term care insurance would need to be substantial in order take care of the care, the bills, and the reverse mortgage. Things to keep in mind
1. The insurance policies must be sufficient to take care of the intended purpose.
2.It is best to speak with a financial planner and/or insurance agent to make sure your goals get met.
3.Make sure the terms of the reverse mortgage in general.
4. Make sure, specifically, you know how long a person being out of the house constitutes a “permanent move.”

This creates complicated issues involving reverse mortgages and titling of assets that only a lawyer can truly answer for you. We, here at Reverse Mortgage Page, need to stick with reverse mortgages. Best of luck in all your endeavors.