Reverse Mortgages Can Help Divorcing Older Couples – Mortgage Issues

Reverse Mortgages Can Help Divorcing Older Couples – Mortgage Issues

So far in 2022, there are over 1.9 million divorced people between the ages of 55 and 89 in Canada.

This phenomenon, commonly known as “grey divorce”, is defined as people over the age of 55 going through a divorce. For many of these people, staying in the home they love is a priority. But you may not have the cash available to finance a purchase.

If you don’t have the means to build new wealth or are struggling to get into debt due to a lack of employment income, it can be tempting to dip into your retirement savings or investments to cover the cost of buying a home. However, there may be another solution.

For those looking to finance their marital home purchase, a reverse mortgage may be the answer. A reverse mortgage can help you access the equity you’ve built up in your home to buy your spouse’s half of the home.

With a reverse mortgage, you can access up to 55% of your home’s value and turn it into tax-free cash. Plus, there are no monthly mortgage payments.

There are many other ways to use a reverse mortgage, such as:

• Health care: 91% of Canadians say they want to stay in their homes as long as possible after retirement. If you’re one of those Canadians, you can use a reverse mortgage to continue living in the comfort of your home and community.

• Renovations/refit: Many customers use the proceeds of a reverse mortgage for renovations and renovations.

• Additional income: Like many other Canadians, you may fear that you may not be able to maintain the same standard of living when you retire because of reduced income. However, with a reverse mortgage, you can increase your cash flow without making monthly payments and be financially secure to live out your retirement on your own terms.

• Unforeseen expenses: You may have the perfect retirement plan that is built to provide you with financial security. However, unexpected expenses are almost impossible to avoid, no matter how much planning you’ve done. Emergencies related to home damage and unexpected health problems can always arise, the costs of which may not be accounted for in your retirement plan. A reverse mortgage can help you access your home’s equity value and provide you with tax-free cash, should you be financially prepared for unexpected expenses.

• Early inheritance: Many clients use reverse mortgage funds to provide an early inheritance to the family. With the cash you receive from your reverse mortgage, you can help support your loved ones now and give them an early inheritance to help with a home down payment.

• Debt Consolidation: One of the most common uses of funds from a reverse mortgage is for debt consolidation. You can use the tax-free funds you get from investing in your home equity to pay off all debts and live a peaceful retirement life.

Big life events, divorce or even retirement, are challenging. Please do not hesitate to contact me to find out how a reverse mortgage can make difficult times a little less difficult.

If you would like to chat, please reserve a time on my calendar here or email [email protected].

This article was written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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