I have a borrower that I did a HECM for 2 years ago. He has since remarried and wants to refi his loan and make his new spouse a Non-Borrowing spouse (she’ll be 61 next March). Does he need to refinance in order for his spouse to gain the benefits of being a non-borrowing spouse, should he pass away, or is that up to the loan servicer? The closing costs would run around $4,400 on a Fixed Rate (5.06%) and he would only “net” an additional $14,000 in cash at closing, so it doesn’t quite meet the guidelines for a HECM to HECM refi but the reason he’s motivated is because of the new, non-borrowing spouse. The extra cash would be a bonus. Can he refinance in this situation?
The new NBS would not be entitled to the NBS rights since they were not married at the time of original closing. They should consider adding her to the loan as an NBS for protection.