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Banks considering new products for those seeking a gray divorce

The process of dissolving a marriage can be one of the most difficult experiences a person can face.  In the Commonwealth of Kentucky and throughout the United States, there has been an increasingly common phenomenon which has gained the moniker of "gray divorce." This term is used for couples who decide to separate later in life. As the frequency of gray divorce has risen, some banks are considering a new product called a "divorce mortgage."

Regardless of the time in life when people divorce, they will most likely have to recalibrate their budgets and spending habits. What was affordable while living as a couple may not be feasible when someone is single. A divorce mortgage may be a good fit or those who wish to stay in their homes but do not have the cash available to do so.

The basic premise of a divorce mortgage is that a couple would determine which person should stay in the home, and that individual would be able to borrow money to buy out his or her former partner. For a set period of time, the bank could then lend the person remaining in the home enough money to pay the interest on the initial loan. When the time period ends, the borrower would have to decide to sell the property – paying the lender the balance from the equity of the home – or assume the full mortgage.

While this new financial product is still being developed, those in Kentucky who are considering filing for gray divorce could benefit from speaking with an attorney. Attorneys whose practice is focused on divorce law will be in an excellent position to discuss a client's unique situation and help create a plan to meet the client's goals. In addition, a divorce attorney will be educated about any new products introduced to the market that could assist his or her client in reaching the best divorce settlement.

Source: deseretnews.com, "As more older couples divorce, this new mortgage may be on the horizon", Lois M. Collins, July 20, 2016

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