In an article he wrote for Kiplinger Personal Finance, Certified Divorce Financial Analyst® Andrew Hatherley says reverse mortgages can solve some key problems in gray divorce.
Go deeper: “Divorce involves dividing assets, including the marital home,” says Hatherley. “Reverse mortgages allow older homeowners to convert part of their home equity into tax-free cash, helping divorcées who need liquid assets to buy out their spouse’s share of the marital home or to fund new living arrangements without selling the home.”
The big picture: Hatherley adds, “The HECM has been reformed over the years. One reform restricts the amount of funds available to a borrower, and another introduced underwriting requirements through a financial assessment. These reforms have coincided with a reduction in the rate of tax and insurance default before and after the reforms.”