A Housing Solution for “Grey” Divorce

A Housing Solution For ‘Gray’ Divorce Clients

Demographic studies reveal that Baby Boomers currently aged 52-70 have the highest rate of divorces and 2nd marriages.

Some of those baby boomers have delayed divorcing until their senior years. “Fifty-five percent of couples were married more than 20 years,” according to a report by Susan L. Brown and I-Fen Lin, sociologists at Bowling Green State University.

Divorcing later in life presents financial challenges. The biggest issue being the home, as it is the single largest investment couples purchase together.

• Do we sell and split the proceeds?

• What are the tax consequences?

• Do I buy my spouse out?

• Can I afford the house on my own?

• Am I trading equity for liquid assets?

• I’m ready for Retirement and how will I start over?

All very valid concerns. The bottom line is both parties will need shelter- whether it is paying a mortgage or paying rent. Being a Mortgage Consultant I see no upside to paying rent.

If there is enough equity in the house to do a cash-out refinance here are some options:

• One spouse buys the other out with a Reverse Mortgage and has no mortgage payment.

• The departing spouse can purchase a new home with a Re­verse Mortgage with 60% down and have no mortgage payment.

• Sell the home, split the pro­ceeds and each buy a new home with 60 percent down using a Reverse Mortgage for Purchase with no mortgage payment.

The home is much more emo­tional for women. They raised their children there, and it’s where the family gathered for holidays. It is important not to make a financial decision based on emotion. No matter where you live you will bring your per­sonal possessions with all your memories.

Divorce itself is difficult on its own. Do not add to the difficulty by putting yourself in an unten­able financial situation. Remem­ber fighter pilots don’t have a rear view mirror.