When getting divorced, many Virginia residents have to make the decision about whether to sell their marital homes or to stay in them. For people with young children still at home, there can be an emotional tug to remain in the home for the sake of maintaining stability for the kids. For people who have older kids off at college or even completely independent, the issue may be more of one of personal stability at a later stage in life. However, the cost of keeping up a formerly joint home by just one person is not always feasible.
A new trend is emerging in the United Kingdom that directly addresses the issue of how to afford staying in a marital home after a divorce for older people. It is actually called the divorce mortgage and is a new type of home loan designed just for this purpose. A loan can be obtained for the amount needed to pay off the spouse who will not be staying in the home plus some extra to be used for interest repayment. This loan is in addition to the existing mortgage.
Exact length of the term for a divorce mortgage is not known but borrowers can choose to sell when the term expires and use the home's equity to repay the full balance. This can essentially buy people more time in their homes.
Homeowners in Virginia may want to talk with an attorney before or during a divorce to understand some of their options regarding keeping a home or selling it. Getting information from an experienced professional can be helpful in making the best choice.
Source: Forbes, “How The 'Divorce Mortgage' Could Help Older Homeowners,” Richard Eisenberg, June 1, 2016