Reverse mortgage non-borrowing spouse guidelines have become easier with the Urban Financial Group, which is a reverse mortgage lender. The company’s guidelines in the past have been that only exceptions could be made for a non-borrowing spouse, but effectively immediately those have changed.According to their old guidelines, the only exceptions to have a non-borrowing spouse was if the spouse has never been on title or does not reside in the residence and does not have or live in a community property rights state. Now, there are other exceptions to this rule.
The following documentation must be received:
- A letter of explanation explaining the reason the non-borrowing spouse will not be involved in the transaction, must be signed and notarized.
- Non-borrowing spouse certification, which needs to also be signed and notarized. This document can be given to you by the lender.
- Attorney letter stating that the borrower and non-borrowing spouse understands the financial implications of making the reverse mortgage loan to become due in full. Such as:
- The borrowers no longer reside in the property as their primary residence.
- The borrowers pass away.
- The property taxes, homeowners insurance and any HOA dues are not paid.
- The property is not maintained in standard living condition.
Also, the letter must explain that the borrower and non-borrowing spouse understands all of these items and wants to proceed with the reverse mortgage:
- If the loan is not paid in full, the home may be foreclosed on and all residents will have to vacate.
- No guarantees that the non-borrowing spouse will be able to refinance to keep the property.
- The non-borrowing spouse waives any right, which includes homestead and community property.
The HUD and FHA are currently reviewing their own reverse mortgage guidelines as to whether or not non-borrowing spouses will be allowed because there have been some previous issues with it. In most cases, the non-borrowing spouse outlives the borrower, but cannot refinance it and does not have the means to pay the loan off, so the lender forecloses on the property.
It is typically recommended that both spouses are on the reverse mortgage loan, unless you have talked with your financial advisor or attorney and you have worked out a plan.
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Reverse Mortgage Non-Borrowing Spouse Guidelines
![Reverse Mortgage Non-Borrowing Spouse Guidelines]()
Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5