Q. My husband and I have been working with a mediator and our next meeting will be to finalize the asset division. Most of the assets are easy – long marriage we divide by two. Our home has $1.5 million in equity and a very small mortgage in just his name. He wants to keep it as a home base for our son who is a junior in college. I understand his rationale, but I would rather downsize now. Our son goes to college out West and has a serious girlfriend there. He spends the holidays with her family and even works in her father’s business during the summer and on all breaks. He doesn’t come home much, and I don’t expect that to change.
I am worried about the economy and cannot afford to hold onto the house for my husband just so he can keep his hopes of Josh returning alive. Instead, I want to move closer to Josh – I do online tech support and can work from anywhere. I want my half of the equity now so I can afford to buy something nice and small with little to no mortgage.
Do you think mediation will fail because of our different objectives? How can I keep it on track?
A. A good mediator will help you and your husband come up with ideas so you can both get what you want and reach a resolution. A few ideas come to mind off the bat.
If your husband can swing the mortgage himself, you can lock into your share of the equity now and agree to defer on the buyout for 18 months by which time he will either have to sell the house or come up with a way to pay you $750,000. You can decide whether he owes you interest for sitting on your equity. You can then move out West and rent something while you get familiar with the area and decide where you want to live permanently. Your obligation to cover the house expenses would end now and you would be guaranteed the $750,000 but not any further appreciation or benefits from paydown on the mortgage as he makes payment. Then the risk of a housing market decline falls on him alone.
If you already know the area and where you want to buy but need a bit of cash for a down payment, you can also propose your husband take out a home equity loan to give you a partial payment now which you can use as a down payment for your new home. Then when he pays you the rest of your equity, you can pay off your mortgage.
Email questions to whickey@brickjones.com