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Older divorce and homeownership

Studies are showing that the divorce rate among older generations is on the rise in Georgia and elsewhere, despite the fact that the overall divorce rate has been declining. Older divorcees have to consider how they will support themselves as they enter into the age of retirement.

Some experts suggest that older women filing for divorce consider the benefits of a reverse mortgage. Reverse mortgages, available to homeowners of at least 62 years of age, allow qualified owners to borrow money against the equity of a home. Reverse mortgages may be paid in a lump sum, in monthly payments or as a ready line of credit. Repayment of the loan is required when the homeowner dies, moves out, or sells the home.

Women should weigh the pros and cons of home ownership to determine whether they want to keep a house following their divorce. Owning a home means being responsible for insurance premiums, property taxes, maintenance costs and decreases in the value of the home.

However, an immediate source of funds obtained through a reverse mortgage could mean that a homeowner will not have to sell a temporarily depreciated asset in order to pay the bills. A reverse mortgage can also forestall the need to make taxable withdrawals from retirement investments. Owners taking out a reverse mortgage should always be careful not to trust purported advisors that recommend putting reverse mortgage payments into risky investments.

A woman contemplating a divorce may want to speak to an attorney experienced in family law matters. Such an attorney may be able to provide advice and counsel regarding the financial implications of a divorce, including matters involving property division and spousal support.

Source: Forbes, "How Reverse Mortgages Can Benefit Older Divorcing Women", Jeff Landers, October 24, 2013

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