Divorce finances
Going through an amicable divorce. I will be staying in the house. We owe $60k, with a value of ~$270. I need to figure out how to pay him something now and then more when I sell. We have no debt beyond the mortgage. We have an open heloc, so I could give him $40k through that. I also have a 401k (which I’d like to keep solid). Where do I find money to pay him?? We considered selling and splitting, but seems like an awful time to do that. (I am 55 and we have two kids in college).
Terry Says
Whew — this is a tough one. Let me ask you a left field question: Where is he going? Does he need that cash now? Since you’re so amicable, can you work out an agreement perhaps for him to keep living there in exchange for not paying him for at least the next X years until the kids are out of college? By then you’ll probably be ready to move into your own place — and it could be a much better time to sell.
Or perhaps you could give him an IOU, with the house as security, written into your divorce decree, to sell within a year of college graduation. That will give your kids a home to come back to on holidays. That would be really amicable!!
Be creative on this, because there are no good answers. That home equity loan will probably be affordable because it is “interest-only” and will result in a balloon payment in 5 years. And that will come as a shock. Early withdrawal from your 40l(k) is a no-no.
