Home sale/equity/divorce/fafsa
Hi Terry, I’ve been divorced for 2 years and in our agreement we are to sell our home (we have no mortgage) of 27 years in July 2026 or I would buy my ex’s share. I was given 65% and he has 35%. We owned a business together and that was my career until our divorce. I do not make enough at this time to buy him out and I paid his share of the legal fees because he was pro se and now I had to take out a parent loan for my daughter’s college tuition. My house is worth about $600,000 and from looking at apartments/condos I don’t have much to choose from and how to move 2 cars, furniture, etc. seems very difficult. Also, my son will qualify for financial aid (FAFSA) but I’m afraid of losing it when I report the home as income. They said you can appeal and I am looking into how that works. Would you sell in the next few months or would you work out the percentage of the proceeds? I’d like to figure out how I can buy him out by either going 50/50 which gives him more money when I go to sell it. My current expenses are very low, no mortgage, I just pay my property taxes and home insurance. I know this sounds very complicated, any guidance would be appreciated, thank you, Terry.
Tina
Terry Says
Have you considered two things:
First, renegotiating with your ex. It would take a lawyer to do that — but perhaps he would prefer some money up front vs a long wait until you could sell your house, and clear taxes. (I’m assuming that your attorney wrote into the agreement that you would share in any taxes owed. Since you are now filing taxes as a single, you can only exclude $250,000 of gain, so if it is more than that, taxes would be owed.)
Second — and I’m sure you’re wondering how you would get enough money to make him a low-ball buyout offer, have you looked into getting a home equity loan? You obviously can’t get 65% of your market value, but maybe you could get 30 or 40%. And that amount would be the buyout offer.
Yes, you’d have a higher monthly nut — But a loan wouldn’t impact your income for FAFSA, and that’s important. And you wouldn’t have to move, assuming you could carry the higher monthly charges. Something to consider …..
