The possible benefits of a divorce mortgage

On Behalf of | Jul 27, 2016 | Property Division

Overall, the divorce rate in Minnesota and around the country is either stabilizing or falling depending on the source. However, a study from Bowling Green found that the divorce rate among those at or over the age of 50 has actually doubled from 1990 to 2014. Reasons for this may include financial issues, petty arguments that get burdensome over time and general boredom. This may have an impact on the banking industry as a product called a divorce mortgage is being considered.

Although still theoretical, it could help older homeowners stay put after their marriage ends. The process would start with the couple deciding who would stay in the house. Typically, those who have an emotional attachment to the property would stay. Lenders would then provide funds to buy the other person out, and extra money would be put in a savings account and used to pay interest on the loan.

Once the interest period ended, the property owner could then repay the loan by selling the property. It may also be possible for an individual to take out a new mortgage if that person can afford to do so. Currently being discussed by lenders in England, it may be available in the United States by the end of 2016.

In a Minnesota divorce, marital property is split by the court among both parties equitably, which is not necessarily equally. In order to avoid a decision that neither party might be happy with, couples who are facing the end of a marriage often ask their respective family law attorneys to assist in negotiating a settlement agreement. This for example, could involve one party staying in the marital home with the other ending up with assets of comparable value to the home’s equity.