Berman & Asbel, LLP

British banks mulling new divorce mortgage

Married couples at or over the age of 50 in Pennsylvania and around the country are divorcing at higher rates than younger couples according to some studies. Researchers from Bowling Green State University found that the number of older couples getting a divorce doubled between 1990 and 2014, and a similar trend in the United Kingdom has led British banks to consider offering a new type of mortgage to older divorced people.

This new type of real estate loan has been referred to as a divorce mortgage by the media, and it would provide a person who wishes to remain in the marital home with the funds necessary to both pay the interest charges on the new loan and buy their former partner out. Divorced spouses often hope to continue living in their long-term primary residences for sentimental reasons or to minimize disruption to their families.

While divorce mortgages have yet to be rolled out in the United Kingdom, a number of observers feel that these financial arrangements could prove popular in the United States. The people who would most likely to be interested in divorce mortgages will usually be receiving alimony payments, and banks may be more willing to consider nontraditional forms of credit when applicants have a reliable and secure source of income.

Negotiations over alimony or spousal support are often contentious when the end of a marriage looms , and spouses are sometimes tempted to accept less than they really want or need to settle matters quickly. Experienced family law attorneys may understand the desire to get through the process and move on, but they could urge their clients to be firm when their future income security is at stake. Attorneys may also pay particular attention to retirement plans and other assets that could provide income in the future during discussions over property division.

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