After 52 years of marriage, Jack and Irene had a lifetime of shared history. They’d raised two children and had four grandchildren. They also had difficult years behind them, and eventually they decided their next chapter would be spent apart.
Divorce brought plenty to work through. Alongside the legal process and the division of assets came a very practical question: How would they each have a home they could afford in retirement? Money that had supported one household would now have to support two.
Irene wanted to stay in the family home, where so many memories belonged. It still had a small mortgage. Jack wanted a condominium near one of their children, the grandchildren, and a golf course. They had different wishes, but both wanted a workable path forward.
Their attorney brought housing into the conversation
Their divorce attorney had worked with Richard before and suggested an introduction. He worked with Jack, Irene and their attorney to explore how home equity could support the housing part of their settlement.
A Home Equity Conversion Mortgage, or HECM, helped Irene access equity in the home she wanted to keep. Jack received his share, then used a HECM for Purchase to help buy his condominium. Each loan served a different purpose, but together they helped the couple arrange two separate homes.
The payment structure was especially useful. Neither had a required monthly principal and interest payment on their HECM while the loan terms were met. They still had taxes, insurance and the other costs of owning their homes, but they could plan their next chapter without adding that monthly mortgage payment to the mix.
There was something worth preserving
Irene got to stay in the home she wanted. Jack got to make the move he’d pictured. Their children were relieved that the housing arrangements had come together without needing financial help from them.
The separation was relatively amicable, and family holidays with everyone present remained happy occasions. A mortgage couldn’t repair the marriage, but the housing solution helped them move forward with one important part of the transition settled. That mattered to the whole family.
It was a difficult change after a very long marriage. Still, having homes that suited their wishes and finances gave Jack and Irene something solid to build their separate lives around.
Review the housing choices while there is still room to choose
A later life divorce can turn a familiar home into a complicated decision. One spouse may want to stay but need a way to pay the other’s share. The spouse who moves may wonder how much of the settlement will disappear into the next home, or whether another monthly mortgage payment will fit.
For eligible borrowers age 62 or older, a HECM on an existing home or a HECM for Purchase may help address those questions. The useful step is to explore the financing alongside the settlement before everyone commits to a housing arrangement. Your attorney remains responsible for the legal advice; Richard can help with the mortgage numbers and provide the possibilities.
He will look at available proceeds, existing debt, cash needed, and the expenses of each proposed home. He will also explain the loan costs and how the balance may grow as interest and mortgage insurance accrue. Borrowers keep ownership and continue to occupy the home as their primary residence, maintain it, and pay taxes, insurance and applicable association charges. Independent HECM counseling is part of the process to help everyone understand the terms of the mortgage.
You don’t need to have every answer before calling. If you’re working through a divorce in retirement, or advising someone who is, bring Richard the housing question. He can explore whether a reverse mortgage could make the next chapter a little easier to arrange. Call or text 404-313-9785, or email richard.mcwhorter@ridgereverse.com.
Richard W. McWhorter, NMLS 1618644. Ridge Reverse, powered by Amerifund. Equal Housing Opportunity. Information is subject to change. This isn’t an offer of credit or a commitment to secure a loan. Eligibility and terms vary. This material isn’t from HUD or FHA and hasn’t been approved by any government agency.