I frequently find myself answering the same questions, so I have decided to begin a “Weekly Scenario” post. If you have a question, let me know and I’ll address it in a future “Weekly Scenario.”
I am going through a divorce and want to stay in the home where I raised my children. However, I don’t have enough money to pay off my ex-husband’s “portion of the marital share.” Can a reverse mortgage potentially help me?
Yes. Here are some things to note:
1) There are no restrictions on how you use the proceeds from a reverse mortgage. You may indeed use the proceeds to pay the portion of the marital share due your ex-husband.
2) Under today’s guidelines, to make a reverse mortgage work the homeowner must have a minimum of approximately 50% equity in the home. However, depending upon the terms of your Property Settlement Agreement you might need to have a home that currently has a small outstanding “forward” (traditional) mortgage.
3) Many family law attorneys are not familiar with the reverse mortgage program. It may be of benefit for you to ask your attorney to speak directly with your reverse mortgage loan officer.
If you have questions regarding reverse mortgage, give me a call or shoot me an email. I always love hearing from you.
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They call it Silver Separation, or the Forty-Year Itch, and it’s one of the nation’s fastest-growing trends: divorce among couples aged 60 and older. In fact, though divorce rates nationally have dropped over the past decade, among older baby boomers divorce rates have risen more than 50%, according to a 2012 study published in the academic journal Gerontologist.
Experts cite many reasons for this trend, including longevity, greater financial independence among women, and less social stigma toward the divorced.
A study conducted by Bowling Green State University states, “Lengthening life expectancies decrease the likelihood that marriages will end through death and increase the length of exposure to the risk of divorce.”
For many, retirement becomes the watershed moment: kids are grown and gone, career battles fought, most major life-choices made.
“It’s a time some boomers look around and ask, ‘Is this how I want to spend the next 30 years?'” says Beth Von Keller, an elder law attorney in Manassas, Virginia. “In some cases a spouse decides the answer is “no.'”
However, later-life divorce can create vulnerabilities. “When older couples divorce, there is less time to recover financially,” Von Keller states. “Also, historically husbands and wives played a major role in spousal caregiving, and couples relied upon each other for emotional support. That falls away when older couples divorce.”
No one plans to divorce, but no life unfolds according to plan. And no amount of planning can insulate one from the unexpected. However, a solid “Plan B” can determine how successfully one navigates a new reality.
Reverse mortgage can play an important role in later-life divorce, providing funds for property settlements where one party wishes to remain in the home. It can also be an important means of income stream replacement.
If you need – or someone you know needs – to assess options, give me a call. I always love hearing from you.