When planning for retirement and managing home equity, two terms often come up: title and reverse mortgages. While they may sound technical, both play an important role in helping homeowners—especially older adults—understand their rights and options.
What Is a Title?
A title is a legal document that shows who owns a property. If your name is on the title, you are the legal owner and can make decisions about selling, transferring, or refinancing your home.
Forms of title ownership may include:
- Sole ownership – One person’s name is on the title.
- Joint tenancy – Two or more people own the home equally, with rights of survivorship.
- Tenancy in common – Owners may hold unequal shares, and ownership can be passed to heirs.
- Community property – Married couples share ownership equally in certain states.
Your choice of title can affect what happens to your home if you sell, pass away, or apply for a reverse mortgage.
What Is a Reverse Mortgage?
A reverse mortgage is a loan available to homeowners aged 62 or older that allows a portion of home equity to be converted into loan proceeds. Unlike a traditional mortgage, you are not required to make monthly mortgage payments. Instead, repayment typically occurs when you move out of the home, sell it, or the last borrower passes away.
Key points to know:
- You remain the owner of your home and keep your name on the title.
- You are still responsible for property taxes, homeowners insurance, and home maintenance.
- The loan balance grows over time and is repaid from the sale or refinance of the home.
Why Title Matters with Reverse Mortgages
The way your home is titled may affect who can apply for and remain on a reverse mortgage. For example:
- If both spouses want to be borrowers, both names should appear on the title.
- If only one spouse is on the title, the other may not have the same protections.
- Updating or reviewing your title before applying can help prevent complications.
Is a Reverse Mortgage Right for You?
Reverse mortgages are not for everyone, but they may be an option for some homeowners. They can provide flexibility in retirement planning, such as:
- Accessing loan proceeds for living expenses.
- Using funds for healthcare or long-term care costs.
- Paying off an existing mortgage, which can reduce required monthly expenses.
- Staying in the home while using available equity.
Whether this option is right for you depends on your financial goals, family needs, and how your title is structured.
A reverse mortgage can be a powerful tool in retirement, but the details of your title can impact eligibility and protections. If you’re weighing your options, connect with our team for clear, personalized guidance.
Disclaimer
This material is for educational purposes only and should not be considered legal, tax, or financial advice. Please consult your own advisors. This information is not from HUD or FHA and has not been approved by any government agency. Borrowers must continue to pay property taxes, homeowners insurance, and maintain the home. Failure to do so may result in foreclosure. Loan proceeds from a reverse mortgage are not considered income and may affect eligibility for certain government benefits. Licensing disclosures vary by state. Please ensure the required company NMLS ID, address, and license information appear at the bottom of your published blog.