Let’s face it, divorce can happen to anyone and at any age.  For seniors who had a financial retirement plan that is based upon supporting only one home, it’s easy to see how divorce is a financial disaster.  For some situations a reverse mortgage may work when one of the divorcing parties wants to keep the home as their primary residence.  The benefit of using a reverse mortgage to ‘buy out’ the other spouse is that there is no monthly mortgage payment.  Instead, interest on the lump sum is taken out against the existing equity in the  home pays the departing spouse their share of the home’s value.  The borrower retains the home in his/her own name and has a mortgage that will increase in size as  interest adds to the loan.  The loan doesn’t have to be repaid until an event happens such as the borrower dies or the home is no longer the borrowers primary residence.

So if the borrower is 62 years or older, and there is  little or no existing mortgage on the property, the next step is to contact a reverse mortgage loan officer.  No, not to make application, instead just to do some homework and get some numbers that are pertinent to the borrower’s situation.  Then the borrower should take those numbers to a reverse mortgage counselor.  That person will help the homeowner understand the implications and help them consider alternatives to a reverse mortgage.  By the way, at such an emotional time it’s very wise for the borrower to have a trusted family member or financial advisor to come along to both these appointments.  This is no time to prove to the world their resilience and independence.

It’s a lot easier to do a reverse mortgage before starting divorce proceedings.  Even so, my advice is to get an attorney, and possibly a tax advisor,  involved to negotiate in pricipal how split all the assets, including the homes equity.  If divorce proceedings have started the borrower can not close on the reverse mortgage (i.e. get the money) until there is a completed and signed settlement agreement.  Things get complicated if the departing spouse is not yet age 62, only one spouse is now on the deed, or the spouse retaining the home is not currently occupying the property.  

Getting a divorce late in life doesn’t have to mean losing one’s home.  For some situations a reverse mortgage is a sensible solution.

By Frederico Stevanin

There is plenty of help available with Reverse Mortgage Loans. As these new types of loans came to be available many of them are offered Federally through HUD, so the Federal Lenders actually require that an approved Counselor and homeowners have a session, it is mandatory. They provide you with a list of professional Counselor to be conducted in person or over the phone.

If you are looking for a loan from a Proprietary Lender, they have to provide you with a list too, but counseling session is not required. However, it is absolutely beneficial that you do get one.

A counselor will look at your income and cost of living to see how your budget and a loan can fit, explain rights as well responsibilities that come with signing up a reverse mortgage loan contract.

Yes, it could be a right choice for you if you are not going to sell your house after signing your Reverse Mortgage Loan Contract. The Reverse Mortgage Loans are designed for seniors so they could tap into a much needed cash that will be paid to the homeowner. That cash can be spend anyhow they want and no money will have to be repaid until the moment the house would be sold.

So if you are planning to live in your house forever and you or your spouse won’t sell it as long as one of the owners are still alive, then the choice of a reverse mortgage could be a great thing for you.

When last surviving homeowner dies then heirs can take on mortgage loan repay, or they might go with selling the house or foreclose it. Then still they will not have any financial responsibilities to that loan and it will not affect their credit. If in result of foreclosure some equity still left, heirs can keep the amount after they take care of liens and other fees required.

The troubled economy is having two effects on senior citizens when it comes to reverse mortgages on their Orlando home.

The first: as home values fall, it is dropping the possible proceeds to seniors who are considering getting a reverse mortgage loan.

The second: More seniors are investigating to learn about getting a reverse mortgage loan.

Orlando mortgage brokers have come to this conclusion based on the many inquires from seniors via the internet and telephone.

During the third quarter 2009, the number of seniors using the on-line  mortgage calculators has increased nearly 90% from the preceding quarter. This important increase in older homeowners researching a reverse mortgage reflects the growth in reverse mortgages overall. Brokers also believes that conditions in the marketplace reducing the amount of money seniors can gain through a reverse mortgage is in part behind the increase interest as many are looking for relief now to take full advantage of their equity. Read more

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