The marital home and housing is an important consideration to sort out for divorcing seniors, and our Certified Divorce Lender Specialists suggest a reverse mortgage could help older couples experiencing divorce late in life it can a) free up capital in the property to be used for another property or b) possibly provide a no-mortgage payment for one of the parties. The statistics on ‘gray divorce’ show that the numbers have doubled since 1990 and tripled for those 65 or older. In fact, sadly gray divorce is becoming an epidemic.
Gray divorce can come with a myriad of financial headaches for those determining what post-married life will look like and how their previously intertwined financial situations can be separated. Housing is one such topic, but experienced Certified Divorce Lending Specialists (CDLPs) suggest that a reverse mortgage could play an assistive role. Jim Blythe, Certified Senior Advisor, Loan Officer, Reverse Mortgage Specialist, Radio Host and Veterans Advocate discussed the ways that a reverse mortgage could be employed for separating couples who meet the loan qualification standards. He stated these loans “are now fully regulated and insured and are no longer the ‘scam vehicles’ they were purported to be in the ‘80s!” The Home Equity Conversion Mortgage (HECM) program was created via legislation in 1988, with the first loan having been originated under the program the following year. Our team of real estate, legal, financial and mental health professionals at the DFW metroplex Chapter of the National Association of Divorce Professionals (NADP) are specially trained to assist in all these critical areas involved in dissolving a marriage at any age.
“It’s just a really wonderful piece of flexibility and creativity for these couples,” Jim added. The partner leaving the marital home could explore a HECM for Purchase (H4P) loan using the equity they have gained. But staying in the home in later life may also prove to be an uneven fit considering the natural limitations that come with aging. (See additional blog titled, “Gray Divorce – The Financial Impact Is Usually Greater on The Woman.” At https://www.survivingdivorces.com/post/gray-divorce-the-financial-impact-is-usually-greater-on-the-woman.) “Maybe this is actually an opportunity for both of them to kind of reimagine the last phase of their lives,” he observed.
Earlier this year, Finance of America (FOA) Vice President of Retirement Strategies, Steve Resch, told HousingWire’s Reverse Mortgage Daily (RMD) that many of his colleagues in the financial planning space are increasingly dealing with issues of gray divorce.
“Another opportunity is the H4P,” Resch said in May. “Planners often don’t realize that they can use that, and many of us are now dealing with ‘gray divorce’ scenarios. Another scenario where this really comes in handy is relocation.” Texas, and when one spouse leaves or passes, they move back to be near family,” he added. “So, I think there’s a huge opportunity there. Gray divorce, eliminating that mortgage payment and managing long-term care risks — those are really, in my mind, the biggest opportunities [for the reverse mortgage industry].”
If you are thinking of, or in the middle of a divorce, we want you to know you're not alone and we’re here to help. If you would like to discuss how we can assist you with your future plans, please give me a call at 469-556-1185.
Geni Manning
Disclaimer: The information provided in this website and our blogs is not intended for legal, financial or mental health advice but is for general informational purposes only. While we endeavor to provide the latest information on a particular subject, future changes to the source Information is beyond our control.
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