Reverse Mortgage Loan Blog

Question: Regarding reverse mortgages, if one spouse remains in the home while the other moves to an assisted living facility, does this trigger the due-on-sale clause? Also, I assume that in-home nursing care counts as “still living” in the home, but I want to make doubly sure.

Answer: The age of the “trailing” spouse is key here. With a couple, both owners must be 62 to qualify for a reverse mortgage. If both owners are 62 or older and one leaves for whatever reason, the loan need not be paid back until the other owner also leaves.

If one owner is younger than 62, he or she must be removed from the title before the other can obtain a reverse mortgage. Therefore, if the remaining owner leaves the property permanently, the loan becomes due and payable.

If the couple has the funds to pay off the loan, they can do so and keep the house. If, however, the only option is to sell the house, then the younger spouse is out of luck. She has to move to new housing.

Also, as you suspect, loan repayment is not necessary if the owner receives in-home care because he’s still living in the home as his primary residence.

As you can see, this is tricky stuff. So it is wise — no, important — to go over possible aspect of a reverse mortgage, not only with the lender but also with an independent third-party counselor.

Found here.

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