Gray divorces are on the rise. A study done by Bowling Green State University in 2013 found divorces for couples over the age of 50 have doubled between 1990 and 2010. When retired spouses look into divorcing, a common problem arises when it comes time to divide equity. The spouse looking to retain the home cannot qualify for a conventional home loan to buy out their spouse due to a lack of income.
A HECM Reverse Mortgage does not carry the same income qualifications that a conventional loan does since monthly payments do not have to made on the loan.
If there is enough equity in the subject property, the spouse can qualify for a lump sum cash out refinance HECM Reverse Mortgage loan.
The receiving spouse can then take the lump sum and using the HECM for purchase reverse mortgage option could use that lump sum toward the purchase and not have to make any mortgage payments on the balance of that loan either.
This way both parties have homes and no mortgage payments which is a win-win for both parties. It isn't a perect fit for everyone but it gives an additional option.
If you would like to learn more about this strategy, please call or text me at 805-276-1942, and I can give you a 10 minute slide show over the phone.
Feel free to use our HECM for purchase loan calculator and HECM lump sum cash out calculator and click here to send me a scenario to see how much you or your client may qualify for. Also keep in mind jumbo reverse mortgages are now available for loans up to $4 million.
C2 Reverse Corp.