STARTING AFRESH WHLE STAYING HOME
In the years following your husband’s death, you had become resigned to spending the rest of your life alone. As fate would have it, you’ve met a wonderful man, himself a widower, and are planning to remarry. While you had originally intended to sell your home this year, moving into an active adult retirement community, you now intend to remodel the home and stay put. The plan is to take a home equity loan and pay it off in five years.
Meanwhile, your fiancé, who is still working, will be selling his condo and moving in with you. The plan is for you to liquidate investment assets to pay for the major overhaul – or perhaps take out a line of credit on the home, but he’s offered to cover the expense of adding an office and bath with its own access door and parking spot, so he can continue his consulting business.
As you’ve explained to your estate planning attorney, you’re not planning to add his name to the title, as you want your home to be part of the legacy passing to your own children. On the other hand, with him being twelve years your junior, you want your new husband to have the option of remaining in the home for the rest of his life.
Rather than liquidating assets or rather than financing your costs for the construction work through a home equity “forward” loan, you might consider a HECM reverse mortgage set up as a line of credit. While you would be the borrower, your husband would be listed as a non-borrowing spouse. That means that, were you to pass away while the loan is still active, he, as the non-borrowing spouse, would be able to remain in the home. (Of course he’d need to continue to maintain the home, taking care of property taxes and homeowners’ insurance.) Your estate planning documents would need to be adjusted to allow for his right to remain in the home before it passes to your designated heirs. On the other hand, it’s crucial that you understand that, were you to be forced to move to a nursing home or care facility for longer than 12 months, the reverse mortgage loan would become due.
It appears that reverse mortgage financing would offer a number of advantages given your description of the situation. No monthly mortgage payments* or loan repayments will be required (either from you or from your non-borrowing spouse). And unlike the case with withdrawals from your investment portfolios, equity withdrawals through the reverse mortgage will have no tax ramifications. In fact, whatever portion of your equity is not borrowed or that has been repaid with grow at the same rate as that being charged on borrowed funds.
Not only will you be starting married life “afresh”, you’ll be doing that while staying home!
https://mutualreverse.com/david-garrison
*Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees. David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.orgEqual Housing Lender