High Cost Of Falling Out
Sun Herald
Sunday June 18, 2000
MY FORMER defacto wife and I bought a $100,000 unit at Coogee in a joint tenancy agreement. We both contributed towards the mortgage. I have contributed $60,000 and we owe $22,000. I want to retain the property, which has an estimated value of $300,000. I am 52 and want to find a lender which will refinance the mortgage, pay out my defacto wife and, as I have no beneficiaries, hold the total payout in perpetuity.
GJ, Coogee
I KNOW of no organisation in Australia that will give you a non-repayable mortgage, with repayments held in abeyance until death.
There have been programs designed for elderly people that will allow them to tap into the value of their home, but they have generally not grown. One of which I am aware is the Sydney-based Sell-Stay program run by a real estate firm that matched investors with ageing homeowners who, in return for a cash amount equal to 40-60pc of their home, were then able to live in it until death.
A second is the Living Money reverse mortgage that Advance Bank used to offer where it paid a small pension to homeowners based on 20pc or so of the value of the house.
The problem with both is that the lender runs the risk of dealing with a prospective centenarian followed by a court case with an unhappy beneficiary of the depleted estate. At 52, you would be too young for either program, even if they were both active.
Separation and divorce usually lead to a fall in living standards for both parties, at least in the medium term. If you cannot afford to buy your partner out, or she you, then I suspect your only option is to sell the property and divvy up the proceeds according to whatever formula has been agreed on.
© 2000 Sun Herald