Tag: spouse

Divorce After Retirement? Reverse Mortgage Can Help

reverse mortgage advisor connecticutIt’s becoming more and more common for seniors to divorce after retirement.  This is happening for various reasons, but a big one is that retirement now last for decades versus only years, and many people are looking to make those golden years the best yet.

But senior divorces can get messy, as there are often many assets to sort out.  During divorce negotiations, a home is often one of these assets.  This home is possibly owned free and clear, or with a lot of equity.  For divorcees age 62 and over, a reverse mortgage can be used as a tool to help with settling this asset during divorce.  The great thing about reverse mortgage is it allows someone to stay in the home and live mortgage payment free, AND access funds from the equity.  Here are a couple scenarios in which reverse mortgage would be of benefit.

Scenario 1: When splitting the home asset, instead of selling the home, one party could be allowed to stay in the home and obtain a reverse mortgage, of which the other party receives the funds from.  This can be a win-win.  In cases like this, the financial settlement can even be wrapped into the loan if the divorce is final before the closing.  This would mean a reverse mortgage would be part of the divorce settlement discussion.  It is important to understand that the party that remains in the home will be responsible for certain obligations pertaining to the home, such as property taxes and homeowners insurance.

Scenario 2: Possibly you’re used to living off two incomes – whether it be from work, or social security and pensions.  Suddenly dropping down to one income can be devastating.  In cases like this getting the home in divorce proceedings can be a huge benefit, as once the divorce is final, a reverse mortgage could be obtained on the home.  The funds could come in monthly installments, a line of credit (that grows), or a lump sum.  In addition, if you wanted to sell the home and move, a reverse mortgage could be used to purchase the new home – and can even allow you seek homes that would otherwise not be in your price range.  The best part?  You will always live mortgage payment free.

If you are considering a divorce, or sifting through the process, don’t hesitate to contact me to further understand how reverse mortgage can help, and whether or not you qualify.  

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.

 

Reverse Mortgage for the Married Couple

reverse mortgage advisor connecticutIf you’re married and have been looking into a reverse mortgage, it’s not unlikely the question keeps arising: ‘What about my spouse?’  This is a perfect starting point for understanding the long term effects of taking out a reverse mortgage as a couple.

Here are a few points to understand:

• As long as both spouses are age 62 or older, they can both be on the loan.  If only one spouse is over the required age, a loan can still be obtained and there are some protections in place for the ineligible spouse.

• The reverse mortgage amount is calculated from the age of the youngest borrower. The older the age, the more money is available.

• If both are on the loan, if one spouse needs to leave the home permanently, such as to move into a health care facility, but the other stays in the home, the reverse mortgage will continue as originated.

• If both are on the loan, and one spouse passes away, while it is true the remaining spouse will continue on with the reverse mortgage unscathed, things will change if they remarry. While remarrying will not affect the original borrower, it can affect the new spouse if the borrower were to pass away or leave the home permanently.  Reverse mortgage does not include the second spouse automatically.  Refinancing or adding the new spouse would have to be considered.

If you are married and considering a reverse mortgage choose a reputable reverse mortgage lender to work with. They can lay out all your options and help you see the long term picture of what will happen in all the different possible scenarios.  It is also especially important to make sure everyone feels comfortable and no one is being pressured into a scenario that could potentially end badly if the proper precautions are not put into place.

Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.