REMARRIAGE MAY BE REASON TO REFINANCE
It’s been nine years since, after arriving at two important decisions (you and your late wife retiring from full-time employment, deciding to age in place in your home), you took out a reverse mortgage. At the time, you used part of the loan proceeds for reconfiguring the living spaces to make them suitable for later years, but have not needed to make any withdrawals since that time. Widowed five years ago, you had been comforted by remaining in familiar surroundings, with no need to make monthly mortgage payments.*
Remarried a year and a half ago, you would now like to add your wife to the reverse mortgage. While each of you wishes to remain in separate control of your assets for estate planning reasons, you want to guarantee her right to remain in the home should illness or death end your own occupancy. The two of you will be sharing the expenses of upkeep (insurance, repairs, etc), and also the costs of redecorating some of the rooms to suit her tastes.
While you know interest rates on mortgages are higher now than they were when you took out the original loan, there’s been significant appreciation in the value of the property itself; you’ve watched neighbors selling their homes for tens of thousands more than they might ever have expected. You’re hoping that a refinance will be a way to take advantage of the increase in value of your own home.
You are correct in that, depending on a new appraisal of your home (sometimes the lower of two appraisals is used), a HECM-to-HECM refinance might help you take advantage of the appreciation of home values in your area. It sounds as if your new wife sill be listed as an “eligible non-borrowing spouse”, so that her right to remain in the home without needed to repay the loan is protected. From an estate planning point of view, it will be wise to discuss your plans with legal counsel.
As you embark on the future together, beyond the legalities, the reverse mortgage line of credit can provide a source of cash for emergencies or lifestyle costs. With no mortgage payments required, the two of you can combine your resources to design your new lifestyle together.
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.org
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