As California residents are aware, the decision to get a divorce is a truly life-altering one. Yet, separating from one's spouse is not always nearly as difficult as many might imagine and the decision can improve quality of life in the long run. While the divorce rate in the nation generally has been declining as of late, the divorce rate for those 50 plus has actually risen. Obtaining a divorce in the later stages in life might feel intimidating, yet there are a number of resources available that can make the process surmountable.
Specifically, some experts consider how the reversible mortgage might be of some assistance to those older separating spouses looking to keep the house in a property division discussion. California is a community property state which means that courts will generally split marital property during divorce right down the middle. Yet, this doesn't mean that a once-shared home has to be sold and the proceeds split. Instead, a couple can agree or a court can order the assets divided in such a manner that one individual can keep the home. This is where reversible mortgages might come into play.
Specifically, reversible mortgages allows individuals 62 years or older to take out a loan on the value of their home. This allows the homeowner to actually receive payments every months on their mortgage, instead of making payments to the lender. The loan then becomes due at the time the owner dies or moves out of the home generally. Thus the reversible mortgage could be a helpful way for one spouse to keep the home in a divorce and manage the payments in the face of losing one income source.
Making the decision to get a divorce can certainly be a difficult one. However, if one has the right tools and knowledge to address the process, a separating spouse might just find themselves better off in the end.
Source: Forbes, "How Reverse Mortgages Can Benefit Older Divorcing Women," Jeff Landers, Sept. 24, 2013