A HECM reverse mortgage is a fantastic mortgage product, but it’s not available to everybody. Yes, a reverse mortgage age limit applies. But how it applies depends on the marital status of the borrowers on the loan.
Before I explain how the reverse mortgage age limit works, let me first address a few basics about how the HECM reverse mortgage works. There is a lot of misinformation floating around out there and I want to make sure we set the record straight.
What is a HECM reverse mortgage?
HECM (which is often pronounced heck-um by industry insiders) stands for home equity conversion mortgage, which is the most common reverse mortgage product in the United States. If somebody you know recently got a reverse mortgage, it’s likely they got a HECM.
The FHA-insured HECM is designed to give seniors 62 or older access to a large portion of their home’s value without taking on a mortgage payment or giving up ownership of the home. No mortgage payments are required as long as least one borrower (or non-borrowing spouse) is living in the home and paying the required property charges.
You always remain the owner of the home and are free to leave it to your heirs. Your heirs can keep the home, sell it, or allow the lender to sell it. Once the reverse mortgage balance is paid off, any remaining equity goes into your state.
The HECM is a non-recourse loan, which means the most that will ever have to be repaid is the value of your home. If the home isn’t worth enough to pay off the entire balance, FHA will cover the shortage.
Reverse mortgage age requirements
Yes, the HECM does have age requirements that must be met to qualify. How the age limit works depends on the marital status of the borrowers:
- One unmarried borrower – If you’re unmarried and on the loan by yourself, then you need to be 62 or older to be age-eligible for the HECM reverse mortgage.
- Two or more unmarried borrowers – If there multiple unmarried borrowers, then all will need to be at least 62 and living in the home to qualify.
- Married borrowers – If you’re married, only one spouse needs to be over the age of 62. Theoretically, there’s no reverse mortgage age limit for the other spouse other than the legal age for signing a contract. If one spouse is younger than 62, he/she will be considered a non-borrowing spouse (NBS). The age of the youngest spouse will be used to calculate the HECM proceeds. If the younger spouse is significantly younger, it can substantially reduce the proceeds available.
No maximum reverse mortgage age limit
There is no maximum reverse mortgage age limit and you are not required to repay the balance simply because you reach a certain age