(Guest blog by Joe Gordon)
One of the biggest challenges in a gray divorce is finding a housing solution that works for both spouses without jeopardizing their retirement.
For many clients over 62, the traditional options, such as selling the home or refinancing to buy out the other spouse, aren’t always realistic. Qualifying for a new mortgage on retirement income can be difficult, and using retirement savings to purchase another home may significantly impact long-term financial security.
For the right client, a Home Equity Conversion Mortgage (HECM), more commonly known as a “Reverse Mortgage,” may provide another option.
Think about a reverse mortgage if your client:
– Is 62 or older with substantial home equity.
– Wants to stay in the marital home or purchase another home after divorce.
– May not qualify for a traditional refinance.
– Wants to preserve retirement assets and monthly cash flow.
Example: A divorcing couple, both age 68, sell their marital home and divide the equity. Instead of paying cash or taking on a traditional mortgage, each spouse purchases their own respective homes using their share of the proceeds as a down payment and finances the balance with a HECM for the purchase. The result may be two affordable homes without monthly principal and interest payments, which helps preserve their retirement income.
A reverse mortgage isn’t appropriate for every client, but it’s an option that is frequently overlooked. Borrowers must continue to occupy the home as their primary residence, and prove they can afford property taxes, insurance, maintenance, and applicable HOA fees.
If your divorce client is over 62, has significant home equity, and is worried about qualifying for a refinance or preserving retirement savings, they may want to consider consulting with a reverse mortgage expert.
If you have questions about a case involving real estate or would like to discuss whether a reverse mortgage could be appropriate for one of your clients, please reach out to me. I’m always happy to collaborate with you and your professional team to help your clients achieve the best possible outcome.
Joe Gordon
Broker / Owner / Certified Divorce Real Estate Expert
Office: 385-393-1153
Email: Joe@Gordon-RealEstate.