Reverse mortgage and later-in-life divorce

Laurie Denker MacNaughton © 2020

According to the US Census Bureau, the rate of divorce has been falling for the past 25 years across all demographics – except for adults over the age of 60. Among this age group, the divorce rate has nearly doubled in the same time period.

Though the reasons for divorce remain fairly consistent across all age groups, those going through a “silver divorce” may face issues specific to aging.

Typically, the greatest challenge facing long-married couples is division of assets. This can become very involved at any time, but there may be additional considerations later in life, in part because there simply has been more time to accrue…well…stuff.

For most couples, the single most valuable asset is the marital home. In a divorce, typically the marital home is sold and the proceeds divided per the Property Settlement Agreement. However, a job, proximity to specialists, or failing health may suggest moving is not the best option for one party.

If one spouse is intent upon – or is in need of – staying in the home, one way to accomplish this can be by means of a reverse mortgage.

Older homeowners are likely to have equity enough in the home for the proceeds from a reverse mortgage to pay the departing spouse’s portion of the marital share. This often makes retention of the home possible, without saddling the spouse remaining in the home with a monthly mortgage payment.

A reverse mortgage will not work in every “silver divorce.” But in many divorces involving homeowners in which at least one party is aged 62 or older, it’s one of the few ways a Property Settlement Agreement’s financial mandates can be met without selling the home, depleting financial reserves, or acquiring a monthly mortgage payment in the retirement years.

Divorce is no one’s “Plan A.” But as the classic line goes, life is what happens while you’re busy making other plans.

If you would like more information on how a reverse mortgage might help you or someone you know, give me a call. I always love hearing from you.

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Weekly Scenario – Reverse Mortgage and Divorce Settlements

I frequently find myself answering the same questions, so I have decided to begin a “Weekly Scenario” post. If you have a question, let me know and I’ll address it in a future “Weekly Scenario.”


I am going through a divorce and want to stay in the home where I raised my children. However, I don’t have enough money to pay off my ex-husband’s “portion of the marital share.” Can a reverse mortgage potentially help me?


Yes. Here are some things to note:

1)    There are no restrictions on how you use the proceeds from a reverse mortgage. You may indeed use the proceeds to pay the portion of the marital share due your ex-husband.

2)    Under today’s guidelines, to make a reverse mortgage work the homeowner must have a minimum of approximately 50% equity in the home. However, depending upon the terms of your Property Settlement Agreement you might need to have a home that currently has a small outstanding “forward” (traditional) mortgage.

3)    Many family law attorneys are not familiar with the reverse mortgage program. It may be of benefit for you to ask your attorney to speak directly with your reverse mortgage loan officer.

If you have questions regarding reverse mortgage, give me a call or shoot me an email. I always love hearing from you.


Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage · 8190 Stonewall Shops Square · Gainesville, Virginia 20155 · 703-477-1183 Direct ·

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Licensed in: Maryland (MD), Washington, DC, Virginia (VA), Pennsylvania (PA), Delaware (DE), North Carolina (NC), South Carolina (SC), Georgia (GA), Tennessee (TN), Florida (FL)