But first, let’s make sure we’re both on the same page about what a reverse mortgage actually is and how it works. There is a lot of misinformation floating around out there. Understanding the basics will make it easier to understand why and how age comes into play.
What is a reverse mortgage?
There are numerous reverse mortgage products out there, but the most popular one is the home equity conversion mortgage, or HECM. If somebody you know recently got a reverse mortgage, chances are it was the HECM.
The HECM is the official FHA-insured reverse mortgage that enables seniors to convert a portion of their home’s value into cash. No mortgage payments are required as long as at 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 will inherit any equity remaining in the home.
Proceeds are commonly used to get rid of existing mortgage payments, eliminate other debts, finance home improvements, or supplement retirement income and assets.
What is the reverse mortgage age requirement?
The standard rule is that you must be at least 62 to be eligible for the HECM reverse mortgage.
It used to be that all borrowers on the reverse mortgage had to be 62 or older. That policy created some problems, so it has since been changed by FHA.
If you’re a married couple, then only one of you needs to be at least 62. The younger spouse will be considered a non-borrowing spouse.
The non-borrowing spouse, or NBS, inherits all the protections of the reverse mortgage if the older spouse dies. As long as the NBS continues living in the home and paying the required property charges, no payments or payback are required on the reverse mortgage balance.
Though the NBS inherits the program protections, they lose access to any funds available in the reverse mortgage. The reverse mortgage locks down when the older spouse dies.
However, if the NBS has since turned 62, he or she could apply for his/her own reverse mortgage to once again access home equity.
It’s also important to note that age is important for determining proceeds. Older borrowers tend to qualify for more than younger borrowers because they generally have a shorter remaining lifespan.
If an NBS is in the picture, the proceeds will be calculated based on the age of the NBS. If the NBS is significantly younger than 62, it can substantially reduce the proceeds available.
So, to sum up, what is the reverse mortgage age requirement? If you’re unmarried, the minimum age is 62.
If you’re married, only one spouse needs to be at least 62. Proceeds will be calculated based on the age of the NBS. If the older spouse dies, the non-borrowing spouse inherits the program protections, but loses access to any available funds.