You have four issues regarding a reverse mortgage with a spouse who is less than age 62, with complications particular to your situation. Your main issues are:
- Qualifying for a reverse mortgage
- Spouse who is not yet age 62
- Community property law
- A separation from your spouse
Let us look at each of these issues, starting with reverse mortgage basics first.
A reverse mortgage is a home loan that converts the equity in a homeowner's home into cash. To protect homeowners, reverse mortgage loans that conform with federal rules, which most do, must follow many requirements. The borrower must:
- Be 62 years of age or older
- Own the property outright or own a considerable amount of equity
- Occupy the property as the principal residence
- Participate in a reverse mortgage counseling session
- Verify income, assets, living expenses, and credit history
You can choose from five payment plans. The amount you can borrow depends on the age of the youngest borrower, current rates, the property’s value and equity, and the mortgage insurance you choose. Other rules and restrictions limit reverse mortgage loans, but these are the key items.
Spouse Who is Less Than Age 62
You mentioned your spouse is less than age 62. If your spouse is listed on the title, then you do not qualify for a reverse mortgage. Here, you mentioned you own your property outright and your name alone is on title. Assuming you meet the other requirements, you qualify for a reverse mortgage even though your spouse is less than age 62.
The FHA recommends but does not require that spouses of reverse mortgage borrowers to attend the mandatory counseling session, even if they are not on the title for the property. The FHA also recommends any children of the borrower attend the counseling session so they understand the implications of a reverse mortgage. Spouses who are not on the title, or are less than age 62 are not eligible to assume a reverse mortgage.
Community Property Law and Reverse Mortgages
You indicated you reside in Texas. Texas is a community property state. In a community property state, even if the spouse is not on title to the property, both spouses must complete the loan application. The non-owner-spouse must authorize the lender to pull a copy of their credit report. Because the assumption in community property states is both spouses have liability for community debt, the purpose of both spouses completing the application is to determine the owner’s potential liabilities.
Here, you may need your spouse to complete the Residential Loan Application for Reverse Mortgages, even though you two live separately. See the section ahead for additional discussion of this detail.
Separation From Your Spouse
In some states, the word "separation" has significance in that state’s family law statutes. In states that recognize separation, it is a legal procedure that has all of the force and meaning of divorce, but does not use that word. Some religions do not recognize or allow their followers to divorce. Separation allows a couple to part ways, and sever some legal liabilities spouses may have to each other.
Texas does not recognize separation. In Texas, a marriage can be ended with an annulment or divorce.
You mentioned you are separated from your spouse. Because Texas does not recognize separation as a means to sever a marriage, you are still married. Therefore, even though you live separately, you two still have liability for community liabilities. Regarding a reverse mortgage, your spouse must complete the Residential Loan Application for Reverse Mortgages and grant the lender permission to access her credit report.
Consult with a Texas family lawyer if your personal relationship with your spouse is at an end. You almost certainly both have liability for community debts. I do not know if your spouse has any claim to the cash-flow you would receive from a reverse mortgage. It is clear that through inaction, she could block your reverse mortgage application by failing to consent to her credit report being pulled.
I hope this information helps you Find. Learn & Save.