New Reverse Mortgage Rules Won't Hinder May-December Romance

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Those with May-December romances should have an easier time getting a reverse mortgage under new federal rules that now allow a spouse under age 62 to keep the house and continue living there. Under the old rules for reverse mortgages, if the older spouse died, the younger spouse would have to either sell their home, refinance its mortgage or pay it off in full.

Reverse mortgages can be a way for long-time homeowners to fund their retirement by using the equity in their homes to get a loan that is repaid, with interest, only when the borrower moves or dies. If the home is sold for more than the loan amount, then the borrower or the borrower’s heirs will get

Being a surviving spouse under 62 no longer means being pushed out onto the street when married to a reverse-mortgage borrower.

the difference. The borrower can take out the money in a lump sum, monthly payment or as a line of credit.

Homeowners must have substantial home equity and be 62 or older to get a reverse mortgage. Such borrowers with younger spouses, however, had difficulty qualifying for a reverse mortgage under the old rules of the U.S. Department of Housing and Urban Development.

Other rule changes released in HUD’s Home Equity Conversion Mortgage, or HECM, this year were meant to protect older Americans with reverse mortgages by lowering loan amounts and reducing withdrawals — to help ensure that they could stay in their homes and could afford property taxes and other expenses of owning a home. A reverse mortgage can eliminate a monthly mortgage payment, making it easier for older people to afford to stay in their homes during retirement.

While a May-December romance, where there’s a considerable age difference among the couple, may not necessarily apply because it can imply an ulterior motive, the new Federal Housing Administration rules do make it easier for younger spouses of those with reverse mortgages to keep their homes. Being a surviving spouse under 62 no longer means being pushed out onto the street when married to a reverse-mortgage borrower.

Loans previously often denied: Updated rules published in April by the FHA started catching on with reverse mortgage lenders in August, says Sean McGeehan, a mortgage loan officer at Peoples Home Equity in Homer Glen, Ill. Before April, a married couple applying for a reverse mortgage — when one spouse was under age 62 and the other older than 62 — was typically denied, McGeehan says. And those who weren’t, ran a sizable risk.

“There were a select group of lenders that would close these transactions and it would cause major problems for the spouse under 62 if the other one passed away,” he says.

Because the survivor wasn’t listed on the loan, he or she would have to sell the house, refinance it or pay it off in full. Refinancing was difficult for some non-borrowing spouses, leaving few viable options for them to stay in the house that they had shared with their spouse, according to the FHA.

But although the new guidelines allow the non-borrowing spouse to remain in the house after the death of their partner, even if under 62, the rules don’t apply to existing loans.

McGeehan says that he had a client, a 65-year-old man, who applied with him in February for a reverse mortgage and was denied. There wasn’t much of an age difference between him and his spouse — only five years — but because the wife was under 62, that was enough to prevent them from getting a reverse mortgage then. The new guidelines will allow the man to do a reverse mortgage, though, which should close by the end of September.

For some people, that can be the difference between retiring comfortably or not at all.

Aaron Crowe is a freelance journalist in California who specializes in writing about real estate and personal finance topics.

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$125,750 :: 1768 Graefield, Birmingham MI, 48009

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2 beds, 2 full baths
Home size: 906 sq ft
Lot Size: 435 sq ft
Added: 06/13/14, Last Updated: 08/22/14
Property Type: 2 Story, Residential
MLS Number: 31197989
Community: Birmingham (63192)
Tract: williamsburg of birmingham
The price of this listing was last reduced on 7/6/2014 by 4%
Status: Sold

MOVE IN READY CORNER/END UNIT. GREAT LOCATION DEEP OF THE STREET WITH PLENTY OF PARKING. REFINISHED DARKER HWF, SOME NEW PAINT AND ALL NEW CARPET. KITCHEN WITH ADDITIONAL CABINETS. BASEMENT FINISHED WITH A BEDROOM WITH A PRIVATE BATH. EXTERIOR WITH SMALL PATIO FOR TABLE/CHAIRS AND GRILL. LOCATED IN THE HEART OF BIRMINGHAM WALKING DISTANCE TO TOWN AND PARKS. PARK IN THE REAR OF THE CONDO FOR EASY ACCESS TO THE UNIT. .

Listed with Real Estate One Troy


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$1,375,000 :: 630 CHESTER, Birmingham MI, 48009-1437

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4 beds, 3 full, 2 part baths
Home size: 3,524 sq ft
Lot Size: 6,969 sq ft
Added: 06/09/14, Last Updated: 08/21/14
Property Type: More than 2 Stories, Residential
MLS Number: 31197163
Community: Birmingham (63192)
Tract: ASSR’S REPLAT OF PLAT TORREY’S ADD
Status: Sold

Custom designed home (Christopher Longe AIA), private 3rd floor office/guest room, 2nd level mst ste with spa like bath and WIC, gracious formal DR on 1st level, casual eating area adjacent to high end kit/fam room/access to private fenced yard. LL offers 1000 SF of finished space including a walk in wine cellar. Many windows makes especially bright inside. Long list of features: 4 FP, wired for central sound system, handsome shake roof, garage designed in style of house w accessible 2nd fl.

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$769,000 :: 1699 MARYLAND, Birmingham MI, 48009-4122

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3 beds, 2 full, 1 part baths
Home size: 3,084 sq ft
Lot Size: 6,534 sq ft
Added: 06/06/14, Last Updated: 08/21/14
Property Type: 2 Story, Residential
MLS Number: 31196821
Community: Birmingham (63192)
Tract: BIRMINGHAM CRESTVIEW SUB
Status: Sold

2011 Rebuilt and Expanded with open main level floor plan, 550 SF 2nd level media room/great room w/wet bar. Large Kit w/Kitchenaide SS appliances/quartz counter tops/glass subway tile back splash/quality cabinets. Bamboo flooring thru-out. Master suite w/spa like bath, premium Grohe fixtures, multi spray shower, adjoining 70 SF WIC. Media room can be adapted to office, work out area, play space for children, or 4th bdrm. Central audio/visual system. Separate climate control systems for each level of home.

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$769,000 :: 1699 MARYLAND, Birmingham MI, 48009-4122

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3 beds, 2 full, 1 part baths
Home size: 3,084 sq ft
Lot Size: 6,534 sq ft
Added: 06/06/14, Last Updated: 08/21/14
Property Type: 2 Story, Residential
MLS Number: 31196821
Community: Birmingham (63192)
Tract: BIRMINGHAM CRESTVIEW SUB
Status: Sold

2011 Rebuilt and Expanded with open main level floor plan, 550 SF 2nd level media room/great room w/wet bar. Large Kit w/Kitchenaide SS appliances/quartz counter tops/glass subway tile back splash/quality cabinets. Bamboo flooring thru-out. Master suite w/spa like bath, premium Grohe fixtures, multi spray shower, adjoining 70 SF WIC. Media room can be adapted to office, work out area, play space for children, or 4th bdrm. Central audio/visual system. Separate climate control systems for each level of home.

Listed with Sine & Monaghan Realtors Real-


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$1,400 :: 401 N Eton Street, Birmingham MI, 48009-5946

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2 beds, 1 full, 1 part baths
Home size: 973 sq ft
Lot Size: 0 sq ft
Added: 07/21/14, Last Updated: 08/20/14
Property Type: 1 Story, Residential
MLS Number: 31203917
Community: Birmingham (63192)
Tract: Buckingham Vlg of Birmingham Condo OCCPN 1150
Status: Sold

Must See! Incredible 2 bed, 2 bath fully furnished condo in popular Buckingham Village includes everything, all furniture & appliances. Great condition, spacious, swimming pool, large locking private storage & laundry in basement. Walking distance to downtown Birmingham. Across the street from Pembroke Park. Ready to move in. Rent includes water & association fee.

Listed with Keller Williams Troy


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$1,500 :: 908 Davis Ave, Birmingham MI, 48009-2072

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2 beds, 1 full bath
Home size: 1,578 sq ft
Lot Size: 4,791 sq ft
Added: 07/21/14, Last Updated: 08/15/14
Property Type: 1 Story, Residential
MLS Number: 31203846
Community: Birmingham (63192)
Tract: LEINBACH-HUMPHREYS WOODWARD AVE SUB
Status: Sold

Architecturally unique home open design for today’s lifestyle. Vaulted ceilings,skylights,cozy loft area above living room,wood burning FP,deck w stone BBQ,hardwood & tiled flooring,informal kitchen/family area. Plenty storage,butchers block & table in kitchen stay. 1year lease w 1.5 sec dep, $250.00 non-ref cleaning fee, will consider pets. Please provide for landlord review & approval: recent credit report w score,copy of last 2 pay stubs & complete application. Pos: Aug 1st

Listed with RE/MAX Showcase Homes


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$1,700 :: 1101 S Eton St, Birmingham MI, 48009-7141

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3 beds, 1 full bath
Home size: 1,122 sq ft
Lot Size: 5,227 sq ft
Added: 08/08/14, Last Updated: 08/15/14
Property Type: 1 Story, Residential
MLS Number: 31206790
Community: Birmingham (63192)
Tract: Sheffield Estates NO 1
Status: Sold

Immaculate brick home,backing to tennis courts & park area.Corner lot allows ample parking.Has newer heating/cooling system for low utility bills,kit has new stainless appliances & granite counter,liv rm w a large bay window to let in lots of light,recessed lights,& fresh hrdwd flr t/o except 1 bedrm.Basement is lg w lots of storage, covered breezeway makes gar access easier plus private fenced patio.min 1yr lease,please use board forms,credit report req,$250 cleaning fee,1st & last months rent +1mo sec dep

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$1,500 :: 1211 Ruffner Ave., Birmingham MI, 48009

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2 beds, 2 full baths
Home size: 800 sq ft
Lot Size: 0 sq ft
Added: 06/11/14, Last Updated: 08/15/14
Property Type: Condo/Ranch 2nd Flr or Above, Residential
MLS Number: 31197699
Community: Birmingham (63192)
Tract: LEINBACH-HUMPHREY’S WOODWARD AVE SUB
The price of this listing was last reduced on 6/30/2014 by 12%
Status: Sold

Updated Birmingham Ranch home. 2 Bed 2 Bath. Granite, New Kitchen, Baths, 2 Car detached Garage, Sharp! For lease, Won’t last long!

Listed with Real Living Kee Realty


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$1,599,000 :: 00 Oak, Birmingham MI, 48009

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4 beds, 3 full, 1 part baths
Home size: 4,800 sq ft
Lot Size: 16,117 sq ft
Added: 08/14/14, Last Updated: 08/14/14
Property Type: Residential
MLS Number: 214084264
Community: Birmingham
Tract: Bloomfield Villas Sub
Status: Active

FANTASTIC OPPORTUNITY TO OWN THIS SPECTACULAR HOME STEPS FROM TOWN. THIS HOME HAS BEEN CUSTOM DESIGNED AND DETAILED THROUGHOUT W OPEN FLOOR PLAN FEATURING A BEAUTIFUL SUN LIT MORNING RM OPEN TO KIT AND FAMILY RM AREA. LRGE MUD ROOM & “COMMAND CENTER” OFFICE IN ADD TO FORMAL DR & STUDY. 2ND FLOOR BOASTS 4 BR SUITES, LARGE WI CLOSETS & LAUNDRY. COMPLETED WINTER 2015. STILL TIME TO ADD YR OWN FINISHING TOUCHES. CONTACT LISTING AGENT FOR SPECS.

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