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The-Mortgage-Gal

Divorce in retirement

Are you a divorced retiree? 

Financial settlements from a divorce can have a big impact on your security. The concern doubles when a marriage comes to an end later in life.

If divorce in retirement is happening to you, you’re not alone. The so-called 'grey divorce' has been identified as a growing 21st century trend.

You can tap into your house for extra income

Although divorcing later in life poses many challenges, you may have access to financial tools not readily available to people in their 30s and 40s.

For instance, if the house is settled on your side of the ledger, you may be able to shore up your finances and enhance cash flow by tapping into the equity of your home.

This is done by arranging a reverse mortgage.

“Instead of selling your house and downsizing or even renting, why not stay in it and receive payments based on its real estate value?” says Arthur Krzycki, a director with HomEquity Bank. “Accessing the equity in your home with a reverse mortgage like a CHIP Home Income Plan is a simple and sensible way to reduce the financial burden normally associated with divorce.” 

How CHIP works

•  If you’re aged 55 and over, you can convert up to 50 per-cent of your home equity into tax-free cash.

•  Unlike other loans on the market, you are not required to service the interest, or repay the principal until you choose to move or sell.

•  You have the option to take a lump sum to pay off your debts or for home repairs and modifications.

•  Or you can schedule monthly advances to enhance your cash flow on a regular basis. Some homeowners do both.

“It’s never too late to bolster your finances by taking money out from your house while continuing to live there. For example, using a reverse mortgage to provide additional cash income could save homeowners from having to sell non-registered investments, or prevent the need to withdraw money from a RRIF above the annual minimum. Both of these strategies will likely have tax implications, so be sure to work with a financial advisor for solutions that fit your needs,” adds Kryzcki.

Additional information on this option is available at CHIP

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About the Author

Laurie Baird and Tracy Head are mortgage brokers with Verico Complete Mortgage Services. Together they have over 45 years of experience in the mortgage industry.

As mortgage brokers, Laurie and Tracy spend time getting to know the people they work with and help them understand the mortgage process. They support their clients before, during, and after a home purchase.

Laurie and Tracy are able to offer their clients advice and options. With access to over 40 different lenders, Laurie and Tracy are able to match the needs of their clients with the right mortgage package. They work closely with their clients to find the right fit, and are around to provide support for years down the road!

Contact them at 250-862-1806 or visit:
http://www.okanaganmortgages.com

Visit Laurie's blog at: https://www.okanaganmortgages.com/blog



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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