By Tyler Plack
Tyler Plack is the President of South River Mortgage. Tyler holds an active FHA Direct Endorsement (DE) underwriting certification and is the author of The Retirement Solution: Maximizing Your BenefitTyler is a seasoned entrepreneur and real estate investor renowned for his expertise in reverse mortgages and his commitment to addressing seniors' equity challenges. Tyler brings a unique perspective to his ventures, having built several successful companies throughout his career. His insights are frequently sought by industry publications, where he is recognized for his vast knowledge in the realm of reverse mortgages.
An avid investor in income-producing properties, Tyler is dedicated to helping seniors navigate their financial needs with compassion and expertise. When Tyler is not helping solve America's retirement crisis, he is a skilled pilot flying airplanes for fun.
Divorce is stressful enough on its own. When a reverse mortgage is involved, many homeowners worry about what happens next. Who keeps the home? Does the loan have to be paid off? Can one spouse stay while the other leaves?
The important thing to know is this: a reverse mortgage does not automatically end because of a divorce. What happens depends mainly on who is listed as a borrower on the loan.
Borrowing Spouse vs. Non-Borrowing Spouse
Check your reverse mortgage paperwork to see who is listed as a borrower.
- A borrowing spouse is on both the title and the loan.
- A non-borrowing spouse is on title only and was not included in the loan (often because they were under 62 when the reverse mortgage was opened).
This difference determines what rights each spouse has to stay in the home and keep the loan active.
When Both Spouses Are Borrowers
If both spouses are borrowers:
- The reverse mortgage can stay in place as long as one borrower remains living in the home.
- The spouse who keeps the home must continue meeting loan requirements, such as paying property taxes and homeowners insurance.
If the spouse who stays later moves out or passes away, the loan will then need to be repaid, usually by selling the home or refinancing.
When Only One Spouse Is a Borrower
If one spouse is a borrower and the other is a non-borrowing spouse, divorce requires more planning.
If the borrowing spouse leaves the home after the divorce, the loan could become due and payable. A non-borrowing spouse does not have the same protections to remain in the home long-term.
Options in this situation include:
- The borrowing spouse stays in the home and keeps the reverse mortgage active.
- The non-borrowing spouse keeps the home by paying off the reverse mortgage through a refinance or sale.
- If the non-borrowing spouse is close to age 62, they may be able to refinance into a new reverse mortgage once eligible.
Understanding who stays in the home is key to preventing unintended consequences.
Age-Gap Scenarios
Age differences can play a major role in divorce decisions when a reverse mortgage is involved.
Example 1:
Borrower is 72
Non-borrowing spouse is 58
If the 72-year-old moves out after the divorce, the 58-year-old may not be eligible yet for a new reverse mortgage. The younger spouse would need another way to pay off the loan or live elsewhere until they qualify at age 62.
Example 2:
The younger spouse plans to keep the home after becoming eligible at 62
They may be able to refinance into a new reverse mortgage once they reach qualifying age and remain in the home long-term.
Planning ahead helps avoid a forced sale during the gap years.
Can One Spouse Buy Out the Other?
Yes. Just like in traditional divorces, one spouse can buy out the other’s share of the equity. Ways to do this include:
- Using savings or other assets
- Refinancing into a new mortgage
- Refinancing into a new reverse mortgage (if age-eligible and conditions are met)
A buyout can allow one spouse to stay while giving the other their share of the home’s value.
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What If Both Spouses Decide to Sell?
Selling the home is a common solution. The sale proceeds are used to pay off the reverse mortgage balance. Any remaining equity is then divided based on the divorce agreement.
This approach gives a clean financial break for both sides.
Key Takeaways
- If both spouses are borrowers: the loan continues as long as one stays in the home.
- If only one spouse is a borrower: the situation depends on who remains and whether the staying spouse qualifies for a loan going forward.
- Selling or refinancing are common solutions when the spouse staying in the home is not the borrowing spouse.
Before Finalizing the Divorce
Spouses should review:
- Who is listed as a borrower on the reverse mortgage
- Who will remain living in the home
- Whether the staying spouse meets the loan requirements
- Available refinancing or payoff options if needed
Early planning can help prevent the loan from becoming due unexpectedly.
Need Help Understanding Your Options?
Every divorce is different, and so is every reverse mortgage. Our team at South River Mortgage can help you understand what is possible and guide you through your choices so you can make the best decision moving forward.
Contact us to discuss your next steps and get a free quote in less than a minute.
Frequently Asked Questions About Divorce and Reverse Mortgages
Does a reverse mortgage end when we get divorced?
No. A divorce alone does not affect the loan. What matters is who stays in the home and whether that person is a borrowing spouse.
Who gets to stay in the home?
That depends on the divorce agreement and who is listed as a borrower.
If at least one borrower continues to live in the home, the reverse mortgage can remain active.
What happens if the borrowing spouse moves out?
If the borrowing spouse leaves the home and a non-borrowing spouse stays, the loan may become due. The non-borrowing spouse would need another way to pay off the reverse mortgage to keep the home.
Can a non-borrowing spouse later refinance into their own reverse mortgage?
Yes, if they are eligible.
Once a non-borrowing spouse turns 62 and meets loan requirements, they may be able to refinance into a new reverse mortgage to stay in the home long-term.
Can one spouse buy out the other’s share of the home?
Yes. A buyout can be done using a refinance, a new reverse mortgage (if eligible), or other funds such as savings.
What if neither spouse wants to keep the home?
Then the home is typically sold. The sale proceeds are used to pay off the reverse mortgage, and any remaining equity is divided based on the divorce agreement.
Does divorce change the reverse mortgage rules for the spouse who stays?
Loan requirements stay the same. The spouse in the home must:
- Live there as their primary residence
- Keep property taxes and homeowners insurance current
- Maintain the property
What happens if we can’t agree on who keeps the house?
The divorce court will decide. However, decisions should include how the reverse mortgage will be paid off or continued to avoid a due-and-payable situation.
