A reverse mortgage can offer several attractive features to the right borrower, but interested parties should heed caution in situations where there is a non-borrowing spouse, writes ConsumerAffairs in an article this week.
ConsumerAffairs, an advocacy organization that covers consumer news, recall information and thousands of consumer reviews, recapped the recent reverse mortgage non-borrowing spouse changes in its coverage of reverse mortgages.
Citing the case of a couple who took out the reverse mortgage prior to the changes in one spouse’s name only and later faced losing the home after the borrowing spouse passed away, the article writes, “The lesson here is, if a couple has purchased a home together, one spouse should never voluntarily remove their name from the deed, just so the other can qualify for a reverse mortgage.”
ConsumerAffairs suggests a home equity line of credit as a reverse mortgage alternative, but notes some shortcomings of HELOCs as well.
Ultimately, the article concludes: “A reverse mortgage may, in fact, be a good option for an older couple that wants to remain in their home until they die or are no longer able to do so….But it’s probably a bad idea for a couple in their early 60s. It most definitely is a high-risk option if one spouse is under age 62.”
Written by Elizabeth Ecker