A couple has applied for a consultation at Bluebell. The house is solely in the husband's name. The wife is over 62 years old, while the husband is still 60. They asked whether a reverse mortgage is possible in this situation, and if so, which method would be better. This question can be divided into two paths. One is to wait until the husband turns 62. The other is to apply now in the wife's name alone, listing the husband as a non-borrowing spouse. Each option has its pros and cons.

First, let's outline the basic structure. A reverse mortgage is a product that allows homeowners aged 62 and older to receive funds by using their home equity as collateral. It is the opposite of a traditional mortgage. There are no monthly payments. Instead, the borrower receives funds in a lump sum, monthly payments, or a line of credit from the lender. The principal and interest are settled when the home is sold, the owner passes away, or the home is no longer used as the primary residence. The most common product is the HECM, which is insured by the FHA. It is the only type of reverse mortgage backed by the federal government.

When comparing the two options, the waiting approach has the advantage of allowing the husband to be included as a borrower. However, it takes time. The option to apply now allows for quicker access to funds. However, if the husband is listed as a non-borrowing spouse and the borrowing wife passes away first, certain conditions must be met to continue living in the home. These conditions vary based on individual circumstances. It is essential to confirm these details with a HUD-approved counselor.

Looking at Bluebell's housing market, the average home value according to Zillow is $696,894 (as of April 30, 2026, a 2.3% increase over the past year). The median sale price according to Redfin is $685,877. While the available equity is substantial, the actual loan limit varies based on age, interest rates, and appraisals.

Costs must also be considered. An origination fee applies. An initial mortgage insurance premium (MIP) of about 2% and an annual fee of 0.5% are added. When combined with closing costs, the initial expenses are significantly higher than a traditional mortgage. Property taxes are another ongoing consideration. The effective property tax rate in Montgomery County is around 1.35%. The median homeowner pays about $5,875 annually. The tax rate was slightly increased in the 2026 budget. Even with a reverse mortgage, the obligation to pay property taxes and insurance remains. A financial capability assessment must be passed to ensure ongoing affordability.

The benefits are clear. Cash flow can be secured without monthly repayment burdens. As a non-recourse loan, if the home value falls below the loan balance, heirs are not required to pay the difference. Conversely, there are downsides. Over time, the homeowner's equity decreases, reducing the assets that can be passed on to children. If property taxes or insurance cannot be paid, there is a risk of default.

Interest accumulates monthly on the outstanding balance. Since there are no payments, the balance continues to grow, reducing the remaining equity. After the owner's death, there are options. Heirs can sell the home to settle the balance, buy it directly for the lower of 95% of the appraised value or the balance, or transfer the home. In any case, there is a deadline. It is advisable to discuss these conditions with family beforehand, as the terms may vary slightly in each contract, requiring careful reading of the documents.

In Pennsylvania, 20.4% of the population is over 65 (as of 2024). This is higher than the national average of 18%. Between 2020 and 2024, the population aged 65 and older increased by 10.6%. This area is seeing a steady rise in the retirement population. As reverse mortgage consultations increase, there are also scams targeting the elderly. HECM requires mandatory counseling from a HUD-approved agency before applying. This is not a mere formality; it is a critical assessment of whether the product fits the individual's situation. It is recommended to make a decision after thorough discussions with family. This article does not constitute investment or legal advice, and consulting a professional before entering into any contract is advised.