Many couples who separate later(seniors 62 years of age or older) find themselves unable to support the costs of a home once supported by two partners now that they are independently responsible.
Here’s where a reverse mortgage can come into play…
The loan allows for the homeowner(s) to choose how to withdraw the equity in the home, whether as a lump sum, a series of ongoing payments or a combination.
If one spouse prefers to remain in the home but cannot meet the monthly mortgage payments, a reverse mortgage can be used to pay off the mortgage, with any remaining proceeds going to the moving spouse. If neither spouse wishes to remain in the home, a Reverse Mortgage Purchase loan allows a homeowner to purchase a new home while taking out a reverse mortgage in a single transaction.
In the same way a standard reverse mortgage can allow one spouse to move to a new home through the reverse mortgage while the other can assume some of the remaining cash proceeds. This might work particularly well in the case where the borrower is downsizing.