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Home Equity and Divorce


                     Help clients 62+ weather divorce and retire better







                     With over 70 million Baby Boomers¹ with an average savings of less than $200,000² and $6.8 trillion tied up
                     in home equity³, it’s important to consider the impact of including home equity as a solution when working
                     with older clients seeking a divorce. From1990 to 2015, according to Bowling Green’s National Center for
                     Family and Marriage Research, the divorce rate doubled for people aged 55 to 64, and even tripled for
                                         4
                     Americans 65 and older . One thing that most couples don’t anticipate planning for in a retirement plan is
                     how to split their assets in the event of a divorce.
                     The FHA-insured Home Equity Conversion Mortgage (HECM) loan has emerged as a valuable strategic tool to
                     enhance the financial outcomes for divorcing retirees that meet the age and equity qualifications.


                     How can HECM loans help stretch
                     split retirement assets further?



                     If one spouse wishes to stay                     If both spouses agree to sell


                     For the spouse who wishes to remain in the home –   If neither spouse wants to continue living in the
                     with enough equity and eligibility – he or she could   marital home and they elect to sell and divide the
                     take HECM loan proceeds in a lump sum distribution   proceeds, each party can purchase a new home using
                     and use them to buyout the other spouse. This allows   their divided proceeds as down payments on new
                     the spouse electing to stay in the home to have no   homes using the funds from a HECM for Purchase loan.
                     monthly mortgage payments. They will however, need   This allows each spouse to purchase a new principal
                     to continue to pay the property taxes, homeowner’s   residence with no monthly mortgage payments using
                     insurance and home maintenance costs.            a HECM for Purchase loan (so long as they continue
                                                                      to pay property taxes, homeowner’s insurance,
                                                                      maintenance costs, and otherwise comply with loan
                                                                      terms).










                                                                            Call today to learn more!












                                                                      1  US Census – https://www.census.gov/prod/2014pubs/p25-1141.pdf
                                                                      2  Economic Policy Institute – http://www.epi.org/publication/retirement-
                                                                      in-america/,
                                                                      3    Harvard Univ. Joint Center for Housing Studies – http://www.jchs.
                                                                       harvard,edu/sites/jchs.harvard.edu/files/harvard_jchs_housing_
                                                                       growing_population_2916_chapter_4.pdf
                                                                      4   Bowling Green’s National Center for Family and Marriage Research –
                                                                       https://www.bgsu.edu/ncfmr/resources/data/family-profiles/wu-age-
                                                                       variation-divorce-rate-1990-2015-fp-17-20.html
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