The issue of what to do with the family home is generally one of the largest financial considerations for divorcing couples, particularly if one spouse wants to continue living there. It may be virtually impossible for that spouse to afford the mortgage and upkeep alone.
There may be a new option on the horizon that would allow couples who divorce to deal with the home without being forced to sell it. It's been termed the "divorce mortgage." Lenders in Great Britain have been studying its feasibility. If they can make it work, it's likely to find its way across the pond.
A writer for Forbes magazine predicted that this type of mortgage could be an option by next year. He called it "a welcome development for older homeowners who want to stay in their houses or condos after a marital breakup but don't have the cash to do so." However, it could be beneficial for couples of any age -– particularly those who have children they don't want to uproot.
The way it would work is that the spouse who was remaining in the home would take out a loan to buy out the other spouse's share of the home. That loan would include additional funds that would be placed in an account. Those funds would be used to pay the loan's interest for a designated period of time.
When that time period is over, the borrower would then decide how to proceed, based on his or her circumstances. The borrower could take over the entire mortgage, sell the property or pay back the lender from the equity in the home.
If the assets in your divorce include a home, it's essential to determine first whether you or your spouse even wants to keep it. If the answer is "yes," whether you're the one who wants to stay there or your spouse is, you need to determine what the financial ramifications are. Your Florida family law attorney can lay out your options for you. It may also be wise to get the advice of financial, tax and real estate professionals.
Source: Deseret News, "As more older couples divorce, this new mortgage may be on the horizon," Lois M. Collins, July 20, 2016