Are ‘Divorce Mortgages’ Coming To Help Older Homeowners?
Gray divorces, or divorces among adults 50 and older, are becoming increasingly more common. In fact, the divorce rate for Americans 50 years old and older has doubled over the past 14 years. Divorce for older Americans, however, has its own unique challenges. Older couples are often either planning for retirement or about to retire, and a divorce can throw a major wrench in those plans. The divorce process itself can be costly, but even after divorce, life as a single person is typically more expensive than married life when incomes are combined. In many gray divorce cases, one spouse hopes to keep their shared family home, but this is unfortunately often too costly for one spouse to handle on their own, especially if they have other large expenses. For this reason, many divorce specialists suggest gray divorcees consider selling their shared home during their divorce and splitting the proceeds. Now, in the United Kingdom, lenders across the country have announced plans to implement “divorce mortgages” at some point this year, and there is a large chance these mortgages will become available in the United States soon as well. Here is what you need to know.
How Will a Divorce Mortgage Work?
In many divorces, one party hopes to keep their family home, only to realize that the costs of maintaining a home as a single person are significantly more difficult to handle than the costs of maintaining the home as a married couple. This is an even bigger problem for older divorcees, who are often either saving for retirement or are about to stop working. Older individuals may also have large bills like their children’s college tuition or student loan payments that may make taking on the family home on their own even more difficult. For this reason, older people who do take on their shared home on their own after divorce often find themselves needing to dip into their retirement just to cover the additional expenses.
To help with this problem, lenders in Britain are planning a new type of mortgage, called a “divorce mortgage” that will become available by the end of the year. Here is how it would work: With help from a lender, the spouse who plans on keeping the home would be able to use borrowed money to buy out their soon to be ex. The loan would also provide the person with extra money to cover loan interest. Once the loan is set to end, the party who retained the home can either decide to sell the home to the lender and pay back the lender with the money earned from their home, or they can retain the home and take on the full mortgage themselves. As one British mortgage adviser said, “It is all about helping someone stay in their home for a set period.”
For Now, Consult an Expert
While this type of mortgage has not been implemented in America yet, it is pretty safe to assume programs like this will sprout up here, considering the increasing number of gray divorces. For now, if you are considering divorce and are wondering about the implications of retaining your home, no matter your age, your best move is to consult a finance or credit specialist who can assess your situation.
If you find yourself on the brink of a divorce or are interested in learning more about the possibility of divorce, you need to consult with a qualified DuPage county divorce attorney with experience. The team at Abear Law Offices is always here to help. We understand the challenges of divorce, and our skilled, professional attorneys will help you through the process as easily as possible. Call 630-904-3033 today to learn more about the variety of divorce and family law services we provide.