Recently, I received an inquiry. A couple was living in an old Lexington home, but the title was only in one spouse's name. They were looking into reverse mortgages to secure retirement funds and were curious about what happens to the non-titled spouse.

A reverse mortgage, specifically a HECM (Home Equity Conversion Mortgage), is a product that allows homeowners aged 62 and older to receive funds using their home equity as collateral. Unlike a traditional mortgage where payments are made monthly, in this case, the lender provides funds instead. The loan principal and interest are repaid when the home is sold, the owner passes away, or the owner no longer primarily resides in the home.

This is where the title becomes important. To qualify for a HECM, at least one borrower must be 62 or older, and the home must be their primary residence. If only one spouse is on the title and does not meet the age requirement, they may be classified as a non-borrowing spouse. Even if the borrowing spouse passes away first, there are protections in place for the qualifying spouse to continue living in the home, but failing to verify the conditions accurately can lead to disputes later on.

There is also a way to prepare the title jointly for the couple in advance. However, both individuals must be 62 or older to avoid issues with the application, and changing the title itself incurs costs and procedures. Changing the title is not always the best choice, so it is safer to consult a real estate attorney regarding inheritance and tax issues as well.

It is also important to consider the housing prices in Lexington. According to Zillow, the average home value in Lexington is $1,626,351 as of June 30, 2026. This indicates a significant equity stake, which means more funds can be accessed. However, the amount available is determined by a ratio based on age, interest rates, and home value, and it is not structured to provide the full amount.

The average effective property tax rate in Massachusetts is around 1.22% (Mass.gov, FY2026). In areas like Lexington, where home values are high, this means the absolute amount of property tax is also substantial. Even after obtaining a reverse mortgage, the homeowner must continue to pay property taxes and homeowners insurance. Failing to manage these payments can lead to default, or foreclosure risk, which must be addressed before applying.

Initial costs are also significant. When adding origination fees, mortgage insurance (initially around 2% and an annual rate of 0.5%), and closing costs, the initial burden is greater than that of a traditional mortgage. However, because of the non-recourse structure, if the home value falls below the loan balance later, the heirs are not obligated to pay the difference. If there were plans to pass the home down, it is important to calculate that the equity will decrease over time, thus reducing the inheritance assets.

In Massachusetts, the population aged 65 and older makes up about 17.5% of the total (according to the U.S. Census ACS). Given the significant retirement population, inquiries about reverse mortgages are expected to increase in the future.

However, reverse mortgages are not the only solution. Downsizing to a smaller home or utilizing a home equity line of credit (HELOC) are alternatives that can also be considered. Each option has different initial costs, repayment methods, and impacts on inheritance assets, so it is better to compare multiple choices rather than deciding on just one.

• Initial costs such as origination fees and mortgage insurance are higher than those of traditional mortgages.
• Property taxes and homeowners insurance must still be paid by the homeowner after obtaining a reverse mortgage.
• Over time, equity may decrease, leading to a reduction in inheritance assets.
• Mandatory counseling through a HUD-approved counseling agency must be completed before applying.

To proceed with a HECM, mandatory counseling through a HUD-approved agency must be completed before the application can be processed. During this process, the title, spouse protection conditions, and cost structure can be reviewed with a professional counselor. Since there are indeed misleading advertisements and promotions targeting seniors regarding reverse mortgages, it is wise to take your time and discuss thoroughly with family before making a decision.