When a mature couple files for divorce their Arizona marital home is often mortgage-free, a valuable asset that must be divided. Along with deciding which spouse shall remain in the home (assuming the property is not sold as part of the divorce and the proceeds divided), an important consideration is the availability of a reverse mortgage on that residence. Parties to a late-in-life divorce need to fully appreciate the benefits and detriments of mature home ownership when deciding who stays and who leaves.
Reverse Mortgaging the Home After a Mature Divorce.
An older divorcing couple has to face financial issues that affect them solely because of their ages. When the homeowner reaches age 62 and enjoys substantial home equity, that real property may be used for a reverse mortgage – that is, the Home Equity Conversion Mortgage offered through FHA. (Although proprietary reverse mortgages are available through certain financial institutions, we’re only discussing the popular HECM program today.)
Under a reverse mortgage, the homeowner can continue living in the home while converting a portion of the home’s equity into cash payments. That the spouse receiving the marital home in the property settlement will have the option of reverse mortgaging (and the other party will not) is an important consideration in a mature divorce.
Here are six important points concerning reverse mortgages:
There are many property settlement and spousal maintenance issues particular to mature divorces. Our experienced divorce attorneys help couples of all ages face marital dissolution with dignity and respect.