Can Cohabiting Couples Get A Reverse Mortgage?

Eligibility Criteria for Cohabiting Couples to Apply for a Reverse Mortgage

Reverse mortgages are a financial tool that allows seniors to convert a portion of their home equity into cash without having to sell their property. While reverse mortgages are typically associated with married couples, cohabiting couples may also be eligible to apply for this type of loan. However, there are certain eligibility criteria that cohabiting couples must meet in order to qualify for a reverse mortgage.

Firstly, both individuals in the cohabiting couple must be at least 62 years old. Age is a crucial factor in determining eligibility for a reverse mortgage, as these loans are specifically designed to benefit seniors. Additionally, both individuals must be listed as co-owners of the property and must use it as their primary residence. This means that the cohabiting couple must live together in the same home on a permanent basis.

Furthermore, cohabiting couples must meet certain financial requirements. One of the key criteria is that the couple must be able to afford the ongoing costs of the home, such as property taxes, insurance, and maintenance. Lenders typically assess the couple’s income and creditworthiness to ensure that they have the means to fulfill these financial obligations.

It’s important to note that if one of the individuals in the cohabiting couple is not listed on the property’s title, they may still be able to apply for a reverse mortgage as long as they meet the above criteria. However, they will need to obtain ownership rights by either being added to the title or through a legal agreement that grants them the right to live in the property.

In addition to meeting the eligibility criteria, cohabiting couples should also carefully consider the implications of a reverse mortgage. The loan amount will depend on factors such as the age of the youngest borrower, the appraised value of the property, and the current interest rates. It’s crucial for the couple to have a clear understanding of the terms and conditions of the loan, including any applicable fees and the impact on their future financial situation.

Cohabiting couples who meet the eligibility criteria can apply for a reverse mortgage. By understanding the requirements and carefully considering the implications, cohabiting couples can make an informed decision about whether a reverse mortgage is the right financial option for their unique situation.

Factors to Consider Before Applying for a Reverse Mortgage as Cohabiting Couples

Cohabiting couples, whether married or unmarried, often consider various financial options to secure their future. One such option is a reverse mortgage, which allows homeowners to convert a portion of their home equity into tax-free funds. However, before applying for a reverse mortgage as a cohabiting couple, it is important to consider several key factors.

1. Homeownership Requirements

To be eligible for a reverse mortgage, cohabiting couples need to meet certain homeownership requirements. Both individuals must be at least 62 years old and listed as co-owners on the property’s title. It’s crucial to ensure that both individuals are listed as homeowners to avoid any issues during the loan application process.

2. Financial Obligations

Cohabiting couples should carefully evaluate their financial obligations before opting for a reverse mortgage. It is important to consider any outstanding mortgage loans or liens on the property. These existing obligations can impact the amount of funds available through a reverse mortgage. Additionally, the couple needs to have a plan for covering property taxes, homeowner’s insurance, and maintenance costs after obtaining the reverse mortgage.

3. Relationship Agreement

Unmarried cohabiting couples, especially, should consider creating a comprehensive relationship agreement before applying for a reverse mortgage. This agreement can outline various aspects such as property rights, financial responsibilities, and potential exit strategies. Having a legal agreement in place can bring clarity and protect both individuals in case of any disagreements or unforeseen circumstances.

4. Future Plans

Cohabiting couples should also consider their long-term plans before applying for a reverse mortgage. They need to discuss and align their goals to ensure that a reverse mortgage is the right financial option for them. Factors such as relocation, downsizing, or changes in the relationship status should be taken into account to avoid any future complications or financial strain.

5. Reverse Mortgage Counseling

Before proceeding with a reverse mortgage application, cohabiting couples are required to undergo counseling from a HUD-approved agency. This counseling session provides important information regarding the costs, benefits, and potential risks of a reverse mortgage. It is crucial for couples to actively participate in this counseling session to make informed decisions about their financial future.

Before applying for a reverse mortgage as cohabiting couples, it is essential to consider these factors: homeownership requirements, financial obligations, relationship agreements, future plans, and reverse mortgage counseling. Thoroughly evaluating these factors will help cohabiting couples make an informed decision about whether a reverse mortgage is the right financial option for them.

Potential Benefits of a Reverse Mortgage for Cohabiting Couples

A reverse mortgage can be a valuable financial tool for cohabiting couples, providing them with a range of potential benefits. Here are some key advantages that cohabiting couples can enjoy when considering a reverse mortgage:

  1. Enhanced Financial Security: A reverse mortgage can provide cohabiting couples with a steady stream of income during their retirement years. This additional income can help cover day-to-day living expenses, medical bills, or even unexpected financial burdens. It can grant peace of mind and financial stability to both partners.

  2. Increased Cash Flow: With a reverse mortgage, cohabiting couples can tap into their home equity without having to sell or move out of their property. This option allows them to access a substantial amount of cash, either as a lump sum or in regular installments, which they can use to fund various expenses, invest, or pursue new opportunities.

  3. Retain Home Ownership: One significant advantage of a reverse mortgage for cohabiting couples is that it enables them to stay in their home for as long as they wish. Unlike other types of loans, a reverse mortgage does not require immediate repayment. The loan becomes due only when the last borrower passes away, decides to sell the property, or no longer uses it as a primary residence.

  4. Flexibility and Control: Cohabiting couples can use the funds from a reverse mortgage according to their specific needs and preferences. Whether they want to make home improvements, cover healthcare costs, or even take a dream vacation, the flexibility provided by a reverse mortgage gives them the freedom to utilize the funds as they see fit.

  5. No Monthly Mortgage Payments: When cohabiting couples obtain a reverse mortgage, they are not burdened with monthly mortgage payments. Instead, the loan balance accumulates over time and is typically repaid using the proceeds from the sale of the home. This can relieve financial stress, especially for retirees living on a fixed income.

It is important to note that while a reverse mortgage offers numerous benefits for cohabiting couples, it also carries certain risks and considerations. It is essential to thoroughly evaluate these factors and consult with a qualified financial advisor to make an informed decision.

Potential Drawbacks or Risks of Obtaining a Reverse Mortgage as a Cohabiting Couple

Understanding the Potential Drawbacks and Risks of Obtaining a Reverse Mortgage as a Cohabiting Couple

While a reverse mortgage can provide many benefits for cohabiting couples in their retirement years, it is essential to understand the potential drawbacks and risks associated with this type of loan. Before deciding to apply for a reverse mortgage, it’s important to weigh these factors carefully to make an informed decision.

One of the main risks of obtaining a reverse mortgage as a cohabiting couple is the potential for financial strain. If one partner passes away or moves out for an extended period, the other partner may still need to continue paying property taxes, insurance, and home maintenance costs. This can put a significant burden on the remaining borrower, especially if they have a limited income or rely solely on retirement funds.

Another significant drawback is the impact of a reverse mortgage on the couple’s heirs. If the couple plans to leave the home as an inheritance, they must remember that a reverse mortgage must eventually be repaid. This means that their heirs may have to repay the loan balance once the last surviving borrower passes away or moves out of the home. It’s crucial for cohabiting couples to discuss this potential financial responsibility with their loved ones to ensure everyone is aware of the repayment obligation.

Additionally, the amount of equity available in the home can decrease over time due to the accruing interest and fees associated with a reverse mortgage. This can limit the options for the couple in the future, such as downsizing or relocating. It’s essential to consider the long-term implications and potential limitations of having a reduced home equity.

Furthermore, cohabiting couples should be cautious when considering a reverse mortgage if they plan to sell the home in the near future. Since a reverse mortgage allows homeowners to tap into their home equity, it can leave less equity available when the time comes to sell. This may result in a smaller profit or even a loss if the housing market declines.

It’s important to carefully review the terms and conditions of a reverse mortgage to ensure that it aligns with the couple’s financial goals and priorities. Some lenders may have higher interest rates or fees, which can significantly impact the overall cost of the loan. Comparing multiple offers and seeking professional advice can help cohabiting couples make an informed decision.

While a reverse mortgage can provide financial flexibility for cohabiting couples, it’s important to consider the potential drawbacks and risks associated with this type of loan. Financial strain, potential obligations for heirs, decreased home equity, limitations on future options, and unfavorable terms are all factors that should be carefully evaluated. By thoroughly understanding these risks, cohabiting couples can make an informed decision that aligns with their financial goals and priorities.

Steps to Apply for a Reverse Mortgage as a Cohabiting Couple

Applying for a reverse mortgage as a cohabiting couple can provide financial benefits and security in retirement. To successfully navigate the application process, there are several steps that cohabiting couples should follow. By understanding these steps, couples can ensure a smooth and efficient reverse mortgage application process.

  1. Research Reverse Mortgage Lenders: Start by researching and comparing different reverse mortgage lenders. Look for lenders that specialize in reverse mortgages and have experience working with cohabiting couples. Consider factors such as interest rates, fees, and customer reviews to determine the best lender for your needs.

  2. Meet Age and Eligibility Requirements: As with any reverse mortgage application, cohabiting couples must meet certain age and eligibility requirements. Both individuals must be at least 62 years old and own the home as their primary residence. Additionally, all borrowers must undergo mandatory counseling with a HUD-approved reverse mortgage counselor to ensure they fully understand the terms and implications of the loan.

  3. Gather Necessary Documentation: To apply for a reverse mortgage, cohabiting couples will need to gather several important documents. These may include proof of age, such as birth certificates or government-issued IDs, proof of homeownership, such as a property deed, and financial documents, including bank statements, tax returns, and proof of income.

  4. Complete the Application: Once all necessary documentation is gathered, couples can begin the reverse mortgage application process. This typically involves filling out an application form provided by the chosen lender. The application will require information about the cohabiting couple’s income, assets, and debts. Make sure to provide accurate and complete information to expedite the application process.

  5. Undergo Property Appraisal: After submitting the application, the lender will arrange for a professional property appraisal. This appraisal determines the market value of the home and plays a crucial role in determining the loan amount. The cost of the appraisal is typically borne by the borrower and can vary depending on the size and location of the property.

  6. Loan Processing and Approval: Once the property appraisal is complete, the lender will proceed with the loan processing and underwriting. During this phase, the lender will verify the submitted information, review the appraisal report, and assess the couple’s financial capacity to meet the ongoing obligations of the loan. If all criteria are met, the lender will issue a loan approval.

  7. Receive Loan Funds: Once the loan is approved, cohabiting couples can choose how they want to receive their reverse mortgage funds. Options include a lump sum payment, monthly installments, a line of credit, or a combination of these. This flexibility allows couples to access the funds according to their individual financial needs and goals.

By following these steps, cohabiting couples can navigate the reverse mortgage application process with confidence. It is important to work closely with the chosen lender and seek professional advice to ensure that the reverse mortgage aligns with the couple’s financial goals and circumstances.


Cohabiting couples can indeed apply for a reverse mortgage, provided they meet the eligibility criteria set by the lenders. These criteria typically include being at least 62 years old, owning a qualifying property, and receiving credit counseling from an approved agency. However, there are several factors that cohabiting couples should consider before applying for a reverse mortgage.

One of the key factors to consider is the ownership structure of the property. Both partners must be listed as owners on the reverse mortgage, and in the event that one partner passes away, the surviving partner can continue living in the property as long as they meet the requirements of the loan. It is important to consult with an attorney or financial advisor to understand the legal implications and potential consequences of co-owning a property under a reverse mortgage.

There are potential benefits for cohabiting couples who opt for a reverse mortgage. One major advantage is that it can provide additional income in retirement, allowing couples to maintain their desired lifestyle and cover expenses such as medical bills or home improvements. The flexibility of a reverse mortgage can also help alleviate financial stress and provide a sense of security for cohabiting couples during their golden years.

However, it is important to be aware of the potential drawbacks or risks associated with obtaining a reverse mortgage as a cohabiting couple. The loan amount is based on the youngest borrower’s age, which means that if one partner is significantly younger, the loan amount may be lower than expected. Additionally, if one partner needs to move out of the property permanently, the loan will become due and payable, which could pose financial challenges for the remaining partner.

To apply for a reverse mortgage as a cohabiting couple, there are several steps to follow. First, couples should research and select a reputable lender who specializes in reverse mortgages. It is advisable to compare loan terms, interest rates, and fees from multiple lenders to ensure the best possible deal. Couples will also need to attend credit counseling to obtain the required certificate before proceeding with the loan application.

Next, couples will need to gather all the necessary documentation, including proof of income, identification, and property ownership. The lender will conduct an appraisal of the property to determine its value and assess its eligibility for a reverse mortgage. couples will complete the loan application process, during which they will undergo a financial assessment to evaluate their ability to meet the ongoing obligations of the loan, such as property taxes and insurance.

Cohabiting couples can pursue a reverse mortgage as a means to enhance their retirement income and financial stability. However, it is crucial for couples to carefully consider the eligibility criteria, potential benefits, drawbacks, and necessary steps before proceeding with a reverse mortgage application. Seeking professional guidance from attorneys, financial advisors, and approved credit counseling agencies can provide valuable insights to help cohabiting couples make informed decisions regarding their financial future.

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