Reverse mortgages are increasingly being used in 'gray divorce' settlements for homeowners aged 62 or older, according to HousingWire. The tool allows one spouse to buy out the other's share of home equity without requiring a sale.
The trend comes as gray divorce rates have doubled between 1990 and 2010, creating a need for creative solutions to untangle shared real estate in later-life splits. Reverse mortgages provide liquidity by tapping home equity, enabling one partner to remain in the home while compensating the other.
No specific data on current interest rates or market-wide adoption was provided in the report. The article focuses solely on the structural application of reverse mortgages in divorce negotiations rather than broader housing market trends.
For older homeowners, the strategy can avoid forced relocation and help preserve retirement assets, but it also carries risks such as accruing interest and reduced inheritance. Financial advisors often recommend careful evaluation of long-term costs.
Critics caution that reverse mortgages may not suit all situations, especially if the remaining homeowner later struggles with loan terms or property upkeep. The approach remains a niche but growing option in estate and divorce planning.