Among the cases I reviewed, there was one where the reverse mortgage application was delayed due to issues with the spouse's name. A couple came in for a consultation; the husband was 65 years old, but the wife had not yet turned 62. Both were listed as homeowners, but we needed to check how the application structure changes when one spouse does not meet the age requirement.

A reverse mortgage is a product that allows homeowners aged 62 and older to receive funds by using their home equity as collateral. Unlike a traditional mortgage that requires monthly payments, a reverse mortgage provides funds in a lump sum, monthly payments, or a line of credit from the lender, with the loan principal and interest repaid when the home is sold, the owner passes away, or the home is no longer used as the primary residence. A typical product is the HECM (Home Equity Conversion Mortgage) insured by the Federal Housing Administration.

Looking at the recent market, the median sale price in Indianapolis is around $259,000 (Redfin, based on the last three months of data as of June 2026). While it is relatively lower than areas like Illinois or Massachusetts, the property tax burden is also lighter. Indiana's effective property tax rate is 0.74%, which is lower than the national average (Tax Foundation, as of 2026). However, a lower tax rate does not eliminate the obligation to continue paying taxes. Korean families moving to Indiana from other states may overlook certain aspects by judging based on the property tax rates of their previous residences, so it is advisable to check the actual tax bill levels in the target area before moving.

There are also multiple ways to receive funds. If a lump sum is needed, it can be taken as a one-time payment; if a certain amount is needed monthly, it can be received as monthly payments; or if funds are needed as needed, a line of credit can be chosen, and it is also possible to mix these options. This choice should be carefully considered during the consultation process, as it depends on financial status and future spending plans.

In terms of costs, the origination fee and mortgage insurance premium (MIP, initially around 2% + approximately 0.5% annually), along with closing costs, can result in higher initial costs compared to a traditional mortgage (CFPB). It is also important to consider that in areas with relatively low property values, the amount of equity available may also be smaller.

As time goes on, the loan balance increases, which reduces equity, and the assets passed on to children may also decrease. If property taxes, insurance premiums, and maintenance costs cannot be continuously paid, there is a risk of default. Over time, interest and insurance premiums continue to accumulate on the loan balance, which can lead to equity decreasing faster than initially expected. However, HECM is a non-recourse loan structure, so if the home value falls below the loan balance, heirs are not required to pay the excess due to FHA insurance.

Returning to the earlier issue with the spouse's name, eligibility requirements must be confirmed, including being at least 62 years old, primary residency status, ability to repay existing mortgages, and passing a financial capability assessment. If one spouse does not meet the requirements, the application structure and subsequent residency issues can become complicated, necessitating a review tailored to individual circumstances. In fact, the couple I consulted earlier decided to postpone their application until the wife turns 62, and adjusting the timing can be one approach.

These aspects should be specifically addressed during the mandatory consultation with a HUD-approved counseling agency. Since scams targeting seniors involving reverse mortgages do exist, careful consideration is necessary. It is also important to note that a reverse mortgage is not the only solution. Downsizing or utilizing a traditional home equity loan are also options, so it is advisable to compare various alternatives. This article is not investment or legal advice, and it is recommended to consult with a HUD counselor, family members, and, if necessary, real estate or legal professionals before entering into any actual contracts.