S3, EP 13: Creative Alternatives for Real Estate During Divorce with Erin Levine
Apr 03, 2024
In this bonus episode of The Crazy Ex-Wives Club, host Erica Bennett is joined by special guest Erin Levine of Hello, Divorce to tackle the pressing issues of real estate amidst divorce. They delve deep into creative alternatives when it comes to dividing real estate in today's market.
Erin shares invaluable resources, like the free home equity split calculator, and discusses creative options like sale-leaseback and home equity investment. They also address the emotional stakes of parting with a family home and the challenges of navigating mortgages and refinancing.
Offering a blend of personal anecdotes and expert advice, this episode is a must-listen for anyone managing the intersection of divorce and real estate. Tune in for insights, support, and guidance on making informed, strategic decisions during these life-changing moments.
Learn More About This Week’s Guest: Erin Levine from Hello Divorce
Erin Levine is not your typical attorney. With over a decade of experience in litigating complex family matters, she saw the need for a kinder, simpler and more affordable pathway out of marriage and into the next chapter of life.
To achieve this, Erin set out to revolutionize the broken divorce system and founded Hello Divorce, a venture capital-backed, tech-enabled platform that combines self-service online tools with integrated expert advice, making it easier for everyone to sort out legal and financial issues with less stress and mess. With Hello Divorce, Erin has helped thousands of people divorce in 1/3 the time and 1/10 the price of traditional divorce methods.
Erin's innovative approach to divorce and the delivery of legal services has earned her media mentions from the legal industry and beyond, with recent features in Vice, Forbes, American Bar Association Journal, Business Insider, and TechCrunch. Her experience as a lawyer, mediator and private judge has led her to understand the roller coaster of emotions that come with a major life transition but she strongly believes that when you help people move forward with confidence and peace of mind, a breakup can always lead to a breakthrough.
Want to calculate what your home equity split might look like? The Split Calculator
Hello Divorce offers complimentary calls with a variety of experts. Schedule a FREE divorce info call
Creative Divorce Solutions in Today’s Real Estate Market with Erin Levine FULL TRANSCRIPTS
Erica Bennett [00:00:00]:
If you have listened to any news lately, you've realized that in the last few years, the entire landscape of real estate has changed. Rent has changed. Mortgage rates have changed. The value of your house has changed. And while this can be a really great thing if you own a house and you can sell it and maybe already have a second property and don't have to buy back in at the high interest rates, what happens if you're trying to get divorced in the middle of this? How do you unwind that mortgage between two people that are no longer in a committed relationship? That is what we're going to explore today. Let's get started. Welcome to The Crazy Ex Wife's Club, a podcast dedicated to helping women navigate the emotional journey that is divorce. I'm your host, Erica.
Erica Bennett [00:00:52]:
And if you're trying to figure out life after the big D, welcome to the club. Whether you're contemplating divorce or dealing with the aftermath or any of the many phases in between, The Club has got you covered. Each week you'll hear stories from women who have been in your shoes. This isn't about spilling tea on divorce details. This is about giving you the tools to take control of your own healing journey. Listen in weekly for advice, tips, and tools to help you move through each stage of the process. Welcome to another episode of The Crazy Ex Wives Club. I'm your host, Erica, and today I have Erin Levine with me.
Erica Bennett [00:01:31]:
Erin is the other half of Hello Divorce. If you remember, we had Heather on in our previous season. Hello Divorce is an online platform that aims to make divorce simpler, kinder, more affordable. What I love is they are all about the information sharing. It really looks at the world of divorce differently. And to be honest, Erin, if I said it quickly, it'd be like you get rid of the belief that you have to have a lawyer to do the process. It empowers you to have the knowledge, the tools, and the access to the legal experts if you need them. So welcome to the show, Erin.
Erica Bennett [00:02:07]:
Thanks for joining me today.
Erin Levine [00:02:09]:
Yeah, thanks so much for having me, Erica. I've been wanting to come on the show ever since you had Heather, and so it was lovely to receive the invite, and I'm thrilled to be here.
Erica Bennett [00:02:20]:
I have been a fan of your social postings for a while. I just felt like it really spoke to the heart of the problem. You could understand that you guys knew what you were talking about, what people were going through, and how to support them. If people missed the other episode with Heather, tell us a little bit more about what Hello Divorce is.
Erin Levine [00:02:40]:
Yeah, well, no one gets married thinking that they're going to get divorced. It's not something that we anticipate when we get married. And yet it happens a lot.
Erica Bennett [00:02:52]:
A lot.
Erica Bennett [00:02:53]:
Like what, 50%? Do you want to like, side note, though, do you want to laugh how they're trying to say, oh, divorce rates went down during COVID Well, yeah, the courts.
Erin Levine [00:03:04]:
Not only were the courts closed, but the courts made it virtually impossible to get divorced across the country. I mean, I could spend hours talking about this, but let me just give you one example, because I feel so strongly about this. So in San Francisco, which, you know, it's San Francisco, thousands and thousands of people filed for divorce, they decided in the middle of the pandemic that they only wanted wet, original signatures. So, you had to go to your spouse who likely was not in your pod, and get their wet signature and then somehow make your way all the way to the courthouse at the start of the pandemic, it was just like, not going to happen. So it wasn't that we all magically decided that we loved each other and wanted to stay in our marriage. That wasn't it at all.
Erica Bennett [00:03:54]:
No, because I knew enough solid, happy, long-term couples that literally said it was touch and go for a little bit because this was a lot of together time. So anyways, I digress. Tell us about Hello Divorce.
Erin Levine [00:04:09]:
Hello Divorce is on a mission to transform the notoriously messy and expensive and adversarial divorce process into refreshingly clear, supportive, and affordable journey from marriage to your next chapter. We simplify every legal twist and financial turn with our easy-to-use technology and expert advice just a click away. What we do is we use technology to automate most of the legal and financial logistics that are associated with divorce, and there is a lot of it. And to add a ton of transparency and speed to a very opaque divorce process. Then we bring in expert advice, flat fee, pay as you go, expert advice from lawyers and financial advisors and real estate experts and divorce coaches to help you or your spouse when you get stuck along the way. And they can do anything from reviewing your documents to helping you sort out conflict. But the goal is to get you through your divorce as quickly and affordably as possible and to sort out conflict in a way that minimizes, well, not only minimizes the conflict, but gets you to a creative agreement that minimizes short term financial burdens and sets you up for long term financial and emotional resiliency.
Erin Levine [00:05:50]:
That's Hello Divorce in a nutshell, right?
Erica Bennett [00:05:52]:
It's so key, right? Because when you're getting divorced, you don't know what you don't know. You've never done this before. And who's the keeper of the information? The lawyers. And where do you find a lawyer, right? I get asked, I just got text this week. Somebody's like, oh, my God, my friend's going through it. What attorney do you recommend? Okay, well, I don't know who to recommend for you. What do you do? You try and Google search it. And I love the fact that you guys, the transparency and the expert advice to me are the two that definitely stand out because, one, you just give everybody, there's the checklist, there's the plan. Like, here's the stuff that you need to think about.
Erica Bennett [00:06:26]:
You need to think about how these things are going to be split up. Or like mine was, are you going to change your name or not? And then having that resource of experts so that it's one thing of, like, great, I have a checklist, but now I got to go find the finance expert and I got to go find the real estate expert. And I think about which, obviously, we're talking about real estate today, but that's such a touchy one, right? Because you either have somebody who's really, really great at real estate or you have a lawyer who's really great at the divorce process. But finding the overlap of the two, because they're both specialties. They're both separate topics that we can kind of understand a little bit about both, but they do create long term impact in your life if either one of those are done wrong.
Erin Levine [00:07:10]:
Yeah, absolutely. And you want them to be talking to each other. Well, you don't want to be paying extra for them to be talking to each other. Right. Let's face it, you want all the information in one place that they can access, but you don't necessarily want to be paying them to catch up about what's going on with their kids. And what's the latest in family law gossip.
Erica Bennett [00:07:36]:
Right.
Erin Levine [00:07:37]:
While you are spending time working on managing your shame and your overwhelm and your fears, we want these experts working on your best-case scenario.
Erica Bennett [00:07:53]:
Yeah.
Erin Levine [00:07:53]:
And it's a work in progress. We've been working on this for a long time, but it's been really exciting to watch the platform grow. And I have to say that over the last several years, we've been able to get divorce. Let's see now. We're at a point where our customers are getting divorced. Done in one third the average time and at one 10th the average cost. It's been really exciting, especially for me, because my background is a family law litigator, which is hard for a lot of people to believe. But my experience is, I've been a family law attorney for 17 years, so this was a big change for me in my career.
Erica Bennett [00:08:38]:
Right, because you think about. You had shared, you have done litigation, you've done mediation, you've done arbitration. Like, that was your specialty. And what made you want to make the shift? Where did this idea then come to, like, hey, we can do this a different way?
Erin Levine [00:08:57]:
Well, when I became a lawyer, I was taught that as a lawyer, you prove your value by winning. And in many areas of law, that is the case. To prove your value, you say really smart things, you understand legal of a jargon, and you win. And the issue with that in family law is that by winning, that extra $20 in child support or that extra night of custody in a month might make your client happy in the moment, may or may not, but it has the effect of destroying a family. It also has the effect of ramping up legal fees, not just in the moment, but for the rest of your child's minority. Right. You might always now be fighting, because instead of building trust, you're destroying it. Instead of helping people come to an agreement, you're ramping up conflict.
Erin Levine [00:09:52]:
And so that was one issue that I was really struggling with. The second issue I was really struggling with as a lawyer was the fact that 80% of people don't have a lawyer. 80%. And the reason is because the average cost of an attorney in the United States is $15,000 per person.
Erica Bennett [00:10:10]:
Crazy. I feel very lucky then, because we split one, and I think, well, we had to go a couple of times, but the first round to actually get it filed before he stopped doing what was in the divorce decree was maybe $5,000, and we split it. And I was in a place of being lucky that we were able to write all of our own agreements ourselves at the kitchen table and then turn it over to lawyer to file it. But even think about that, we did all the work. She just needed to file the paperwork. We still had to pay her five grand. And I loved the support and the help that I got along the way, but could we have probably figured it out on our own if, Hello Divorce had been there back in the day? Probably. I do want to say you gave me goosebumps.
Erica Bennett [00:10:50]:
When you win in a divorce case, somebody else has to lose. And a lot of times it's the kids. And so when you go in and you haven't done the work on the inside, and your goal is, I'm going to win to make them hurt. Right. So now you just heard lawyer's job is, how do I know I'm valuable? I got to win. And you're sitting there being like, how do I know I won? Well, I made them hurt as much as they made me hurt. Nobody wins in those situations, you guys. And so being able to look at it on how do we both win? How do we both walk away from this? Because we're both hurting.
Erica Bennett [00:11:24]:
We're both suffering. Nobody is happy that they're getting divorced, even in the moment. Right? That's why I kind of don't dig those divorce parties, right? Like, yes, it's a celebration and it's a new chapter, and yes, you want to move forward, but there's still a lot of pain to be honored and reflected in it.
Erin Levine [00:11:41]:
Yeah, I think you've heard the saying, we can be happy, we can be hurting, we can be healing all at once, right? All at once. It's okay. I want people to have the ability to celebrate. Not to throw it in our ex's face, but I want them to have the ability to celebrate. I think we can view marriage very much as success, even as it's ending. It taught us how we want to give and receive love. That's very important. But I definitely resonate with this piece around children when our goal is to protect them and help them grow, to provide them skills like modeling happy and healthy relationships with others and ourselves, to teach them resiliency and empathy, organizational skills, and all the wonderful things that divorce can actually teach kids.
Erin Levine [00:12:34]:
We can't do that if we're throwing them in a situation where we're always in conflict and tension with our ex because we're always fighting in a lawsuit. And it made me ill. It made me ill to be a complicit participant in a system that was constantly routing people through war. I knew we could do better, and I had built this beautiful law firm, and I was making really good money, and I had two little girls at home, and it was really scary to pivot away from it, but I knew it was time. And I did this incredible discovery session where I brought in hundreds and hundreds of people who had just been through the divorce process. And I interviewed them. Not just me, but a bunch of us just interviewed them and learned so much about their experience and what went right and what went wrong and what we could have done differently.
Erin Levine [00:13:32]:
And we learned so much. And the biggest thing that stood out to me was that the divorce industry, for the most part, I'm not talking about the wonderful things that certified divorce financial analysts and divorce coaches do, but really what I'm talking about is like the court system and some of the lawyers and some of the big players that stand to make the most money off the system, their incentives aren't aligned with what the rest of us need as we're traveling through our divorce.
Erica Bennett [00:14:02]:
Right.
Erin Levine [00:14:04]:
Welcome. Hello Divorce, right?
Erica Bennett [00:14:10]:
Are you at a crossroads contemplating whether to stay or go in your marriage? It's okay to feel lost, to feel scared and even uncertain. Hey guys, this is Erica. And I get it. I felt the same way. I was afraid to make the wrong choice. But I also knew that I wanted more. I want to invite you to join The Crazy Ex-Wives Club Cohort. It's not just for divorced women, but it's also for those who are trying to find clarity on whether or not they should stay.
Erica Bennett [00:14:38]:
In this twelve-week program, you'll be guided from confusion to clarity. We'll move you from fear to confidence. It's all about helping you identify what you want, who you are, and how you want to thrive. Moving forward, it's time to capture what you truly want in life. So, join us on this transformational journey. Visit www.thecrazyexwivesclub.com because your path forward starts here. Let's talk a little bit about real estate specifically, just to make a big pivot. I mean, I think we'd probably end up having a two-hour podcast, but eventually.
Erica Bennett [00:15:17]:
Absolutely.
Erin Levine [00:15:17]:
I want to get to the juicy stuff, right?
Erica Bennett [00:15:19]:
The juicy stuff. Because in my situation, here's what I knew, or I didn't know, right? I knew we had a house together. I knew that we had a down payment, and then we had the monthly amount. I had always paid the mortgage. He had always paid like the credit card bill. We didn't join accounts. We kept accounts separate, but we were both on the mortgage and so we had to negotiate how much was he going to get out of the final profit of the house. After we sold the house and all the fees came out of it and whatever else, and that was kind of about it, my lawyer was like, okay, we'll figure out what percent he makes when the house is sold and then figure out.
Erica Bennett [00:15:53]:
And I think she was like, on average people, you get about three months or something like that, right? There was a recommendation of what the typical process or recommendation is. For how much time I have to sell the house. Because he had moved out, he was renting a different place. I had continued to live in the house. The lawyer also informed me, well, the value of the property or the money you put in, since he moved out, he doesn't earn off of that. So that's a little separate, too. And lucky for me, mortgage rates hadn't changed that drastically. I think we were at like two something when I moved and got my new place, I landed at three something.
Erica Bennett [00:16:29]:
So that's really not that big of a deal. But now, right, looking at seven, looking at eight That's a really big shift. When I look at a house now and I do the little calculator where I check the monthly payment if my interest rate is what it is right now, what would my monthly payment be? It's usually half of what it would be with the current interest rates. Why shouldn't somebody just rely on their lawyer on making these kind of real estate decisions? And actually, before you answer that, let me let you guys know. So not only is Erin a lawyer, not only has she started Hello Divorce, but for the last year, she has dug deep into understanding this real estate industry. She has spent her time learning about the know, bringing in her expertise around the divorce process, her expertise around all of these people that she interviewed of what worked and didn't work. And now she is applying it to this new lens of real estate. So why, thank you.
Erica Bennett [00:17:32]:
Yeah, she's doing the work, you guys. That's the beautiful part. She's doing the work for us. We can just go to Hello Divorce and we could type in and find what we're looking for. But tell us a little bit about what you've learned in the last year.
Erin Levine [00:17:44]:
Okay, so go to Hello Divorce and type in home equity split calculator. You certainly can do our free calculator. If you're feeling antsy and you're just curious, go for it. I want to plug that. It's free, but we're going to back way up. Erica. We're going to back up and talk about why I became interested in spending a year digging into real estate. And here's why. And don't take this as bashing other lawyers.
Erin Levine [00:18:12]:
There are so many amazing divorce lawyers that have and will be on the show that both you and I can refer people to. But we didn't go to law school because our specialty was real estate or finances or therapy. We have a lane, and we generally stay in it. And the same thing goes for divorce judges. Divorce judges are there to move cases forward because they have thousands and thousands of divorces that are coming through their courtrooms every day. So when a couple comes to them and says, we have a house and we can't come to an agreement on what to do with it, there are generally two options that a lawyer will give you. One is one of you can try to buy the other spouse out. That's what Erica was alluding to.
Erin Levine [00:19:09]:
Right. You can figure out what the value of the house is and how much equity is in it. So I'm assuming for purposes of this conversation that most of us have a home that's owned jointly. We bought it during the marriage. We used our earnings, one or both of us used our earnings to pay down the mortgage. Now, sometimes there's more nuance. One of us might have bought it before marriage. One of us might have used a down payment from an inheritance we got from grandma and put that down on the house.
Erin Levine [00:19:44]:
There might be some nuance. All of that we can work out. It is not as complex as the lawyer blogs want to make it out to be, and we can provide some resources in the show notes to help you figure it out. But for purposes of this conversation, we're going to assume that it's joint property and we want to figure out the value of the home, the fair market value. Just go to Zillow. It's not the best. But go to one of these tools online to get a general sense for the value. Then we look at what's owed on the house, what does your mortgage statement say? And we subtract the fair market value and how much you owe on the house.
Erin Levine [00:20:25]:
And the difference between the value and the mortgage balance is the equity. And the way you buy your spouse out is you have to pay them half of that, either by refinancing your house or by offsetting with some other asset, like a retirement account. A lawyer will say, you have to either figure out how to buy your spouse out or we have to sell it and you split the proceeds. And then what usually happens is this long negotiation around whether or not you can actually buy out your spouse. You might talk to a mortgage broker. Do I have that right, Erica? Is that usually what happens? You end up talking to a mortgage broker to see if you qualify and if you can afford it?
Erica Bennett [00:21:11]:
Yeah, I think right now, yes, because, and things are so different. Right. And again, I haven't done it recently, but things are so different on being able to even qualify for a loan and with the new interest rates, right?
Erin Levine [00:21:22]:
Yes, we'll get there.
Erica Bennett [00:21:23]:
You get the data, and then you got to figure out, can I pay that bill? Is it even an option or what do I need to do?
Erin Levine [00:21:30]:
Yes, absolutely. We will get there. Then we get there and then if the couple can't come to an agreement, let's say wife wants to keep the house. And wife says, I qualify, but husband says, yeah, but I think you're valuing the house too low. They can go in front of the judge and the judge can say, all right, you guys can't agree. We're just going to sell the house. Well, I had a big problem with that.
Erin Levine [00:21:55]:
I had a big problem with that because the house is a much bigger deal than any other asset for most of us because it represents so much more. We need to know whether or not it's something that we can keep. And not all of us want to keep it forever. Sometimes it's simply to get our high schooler through their varsity football season or to get our kid through their confirmation program with their friends. Sometimes it's to keep our children around their community while we get through the divorce process. Sometimes it's to keep them through with their friends in the local school. And rent would be far more than what our mortgage currently costs. There are loads of reasons why we might want to stay in the house for the next couple years or the next couple decades.
Erin Levine [00:22:53]:
But if we look at just whether or not we can buy out our spouse or whether we can sell, it's not really reasonable two options. Especially what Erica was saying with right now, because the mortgage rates are so sky high that even if we're lucky enough to qualify for a mortgage, most people can't afford it because the new mortgage payment is going to be so incredibly high because that interest rate is so high.
Erica Bennett [00:23:25]:
Yeah. And in my case, what happened was we had come to the agreement of what portion of the value, the equity of the house he was going to get. And when I thought about refinancing, it felt so gross for me to pay more for the same house.
Erin Levine [00:23:39]:
Yeah.
Erica Bennett [00:23:40]:
Because I was sitting in a place of well, he cheated. He did this to me. And now I have to pay more for the house that I've been paying for ten years. Right. And it was time, like, you repaint, and it needed just the normal love that the house needed again. And so, I made the decision to sell it because that feels gross to me. I don't want to every month write another check for the same house that I have to repair and pay more for. That just was like gross.
Erica Bennett [00:24:08]:
But it was a big deal because that's when my son really started having some issues. Once I moved, him coming back to the new house, that's when we had outbursts. That's when we had meltdowns, because it was a different space, and it took us a year to really let that piece go. The house is so important to everybody.
Erin Levine [00:24:26]:
Did you ended up keeping the house?
Erica Bennett [00:24:29]:
I sold it.
Erin Levine [00:24:30]:
You sold it?
Erica Bennett [00:24:31]:
Yeah. I manifested in, because literally, I closed on my new house in 28 days. They're like, you can't do that. And I'm like, I can. My real estate lady is like, you are crazy, and I love it. She was not crazy in a bad way. Right, guys? That's the club. But, yeah, I did one walk through for five minutes.
Erica Bennett [00:24:49]:
I said “write the offer. This is what it is.” And then we're done. And it was. And I'd been looking for a year. I had known that this was going to be coming eventually. I ended up selling it.
Erica Bennett [00:25:02]:
When we sat and signed our paperwork and turned over the keys. Right. He got cut one check and I got cut the other check, and then I had to finish packing it up. Right. Then I had all the emotional part of saying goodbye to the neighborhood and getting the last stuff out of the house and all of those big grieving processes.
Erin Levine [00:25:18]:
Yeah, absolutely. If keeping the house for a short period of time or a more extended period of time is something that is important to you or your spouse, I wanted to understand what the options are. I didn't believe that the only option was to refinance. And assuming that refinance was the only option, I wanted to understand how to better position yourself for a refi, because what I had learned is that there is a certain type of professional out there that I had no idea existed. A certified divorce lending professional. They won't cost you a thing up front. If you ultimately use them, they'll be paid in the transaction itself. Who can help guide you on whether or not a buyout is the right option for you and what kind of terms you might need to put in your divorce agreement itself to help best position you for your buyout, what kind of things you need to do during the divorce, but before your divorce is final, so that you qualify for a refinance and so on and so forth. There's the buyout itself, which these days ordinarily is a great option, but you want to make sure that you do it at the right time and you don't just stick a term in your agreement that says, sometime after your divorce, within 90 days, I'll buy out my spouse.
Erin Levine [00:27:00]:
But instead, you talk to a certified divorce lending professional, a CDLP before your divorce is ever finalized to make sure you get good advice about when and how you refinance, or you look at some of the other options that are available to you that are creative and different and might apply. And those were some of the things that I was thinking we might be able to talk through a little bit today.
Erica Bennett [00:27:26]:
Yeah, let's talk through those because I think that's the thing. The cool part about divorce, if you can even say that, is you can be as creative as you want as long as everybody agrees and so you don't have to be stuck doing it just the way that it's always been done. What are some of these creative ways that you found?
Erin Levine [00:27:44]:
Yeah, so the first thing that we had to do was look through about 150 options that are on the market, the vast majority of them being very predatory. Once we got through those and figured out what options are not predatory and actually are viable and work not for everyone, but for a lot of people, then we were able to include those not only in our equity split calculator, but also talk you through them in our real estate divorce sessions. One of them is a sale leaseback. Now, this is not for everyone, but if you want cash now, but you aren't attached to owning your home forever, but you want cash now and you want to continue to live in the house for a specific period of time. One option is called a sale leaseback. This is where you sell the house now, but you negotiate terms where you continue to live in the home for a certain period of time at a certain price, you can also keep the option to repurchase the home for a certain amount. You remain as a renter until you're ready to move. But at any point you can choose to repurchase your house for an agreed upon price.
Erica Bennett [00:29:09]:
Who's the buyer?
Erin Levine [00:29:10]:
It's one of the companies that we've negotiated with that we're working with.
Erica Bennett [00:29:14]:
Got it.
Erin Levine [00:29:15]:
And I have to say that I'm not the expert. We have the most amazing experts on our team that you'll be talking through that will walk you through this. I'm not the expert. I'm talking you through the options.
Erica Bennett [00:29:27]:
I was thinking about that.
Erin Levine [00:29:28]:
So great, right?
Erica Bennett [00:29:29]:
Because that sort of a concept had come up recently as I'm looking at properties. Something had come up and I was like, I don't need to move in today because we're halfway through the school year. I'm not going to pull my kid. But the person couldn't afford their mortgage anymore. And I was like, well, do they want to stay a renter? Because I want to invest in it, but I don't need it today. So that's why I was like, wait, who buys it to then give it back at the end of it? I love that. So, yes, so there are companies. That's one option from the buyer.
Erica Bennett [00:30:00]:
What was that called again?
Erin Levine [00:30:02]:
That is called a sale lease back. And I encourage you with all these options to either schedule with our real estate experts or to use our equity split calculator or do both with, Hello Divorce. They both aren't going to cost you anything because there's a lot of these options out there. We did a really good job vetting which companies are actually going to be helpful and which are going to be predatory.
Erica Bennett [00:30:30]:
Love it. Okay, what's next?
Erin Levine [00:30:32]:
So another option out there called home equity investment. And this is a really great way to access home equity now to get you some cash in exchange for a portion of your home's future value. So let's say you want to keep your mortgage. You don't want it to go up, but your spouse wants to be bought out. What you do is you have this third party come in and they purchase your spouse's interest, and they go on title, and they now own a portion of the home. But when you later decide to sell the home, your new partner will share in the profits. If the home value decreases, this partner company covers the loss up to the original investment. It's like a pretty simple approval process.
Erin Levine [00:31:30]:
There's no interest, there's no monthly payments. You don't have to have the best credit, and your spouse gets their cash up front.
Erica Bennett [00:31:40]:
It doesn't work in every situation, but it's an option.
Erin Levine [00:31:44]:
It's an option.
Erica Bennett [00:31:45]:
We'll use some very simple math. Let's say my house worth $100,000 and my partner or my ex was getting 30%, okay, he's got $30,000 that I need to pay him out. I don't have the money. This other company gives him the $30,000, and now it's like they own a 30% share in my property. So when I go to sell it. If that property went up and doubled in price, they now have a $60,000 investment. Right. And I have a $200,000 home.
Erica Bennett [00:32:18]:
Or if it went down in price and it went to $50,000, they now only have a $15,000 value, and they just write off the loss of the other money. Am I understanding it correct? Yes. That's a pretty cool option as well. Yeah. All right.
Erin Levine [00:32:33]:
Should we cover a couple more?
Erica Bennett [00:32:35]:
Yeah. Okay. I just like that there's options, you guys, because even in my situation, I felt like there weren't any other options.
Erin Levine [00:32:42]:
Exactly. I didn't know about any of these as a lawyer. I was like, okay, you could try to refi. Towards the end of my litigation career, I did send people to certified divorce lending professionals, but I sent them to certified divorce lending professionals that worked for certain banks, because that's where most of them live. And if they work for a bank, it's their goal to get you a mortgage with their bank. The thing about ours is they work for you. They're neutral.
Erin Levine [00:33:16]:
So they're out there trying to get you the best deal from a bank of your choice, which is kind of cool, right? Like wedded to any particular bank. They're trying to find you the best deal out there, which I think is pretty cool. All right, so some of these you would probably know about. A cash out refinance we talked about earlier, where you refinance your existing mortgage, you get cash out, you pay your spouse. Now your mortgage goes up, and not just because of the cash you took out, but because the mortgage rates these days are much higher. Hopefully by the time this airs, they will have gone down some. But this is by far the most popular style.
Erica Bennett [00:34:00]:
Yeah, I think that's the traditional. That's the traditional option.
Erin Levine [00:34:02]:
That's the traditional. Now let's do another one. Okay, so this one I mentioned to my mom the other day, and she was like, what is this, 1985? And I laughed so hard. And she's right. Like, we haven't heard of this since the 80s, which is a mortgage assumption. And I cannot tell you how many times I've had clients ask me over the years, well, can't I just keep the mortgage? Why can't we just do an interspousal transfer deed where the title code goes to me and I keep the mortgage, I can afford it. And I'm always like, no, you can't do that. That's not allowed under the law.
Erin Levine [00:34:37]:
And for the most part, or under mortgage rules or whoever regulatory body handles any of this stuff. For the most part, it hasn't been allowed and it's not allowed. But now, by the laws of whatever it is, mortgage assumptions are again allowed under certain circumstances. I don't know all the rules, but that's why we have the experts who can tell you whether or not in your situation, there is the ability to assume the mortgage. If you can afford on your own the existing mortgage that you and your spouse currently have, you might actually be able to put it in your name only.
Erica Bennett [00:35:15]:
It's so interesting. I was wondering if this was going to be one of them because it just recently crossed my social feed. Something was in there, right? And I was like, what is this, an assumable mortgage? And I literally last week had the conversation with my partner. Why would everybody not set this up from the beginning? Nobody thinks the divorce is going to fail. But why would you not just have a clause in your mortgage that says either partner can assume full responsibility if blah, blah, blah, blah happens and buy out the share? So I have not gotten much farther in my research, but it sounds very interesting.
Erin Levine [00:35:49]:
Yeah.
Erica Bennett [00:35:50]:
Okay.
Erin Levine [00:35:50]:
We talked about this home equity option, right? Where the money is given to you in one lump sum. There is a home equity line of credit. That's not a new option. We've called it a HELOC before. That is where you borrow an equity from your home, and you repay the fund on an as needed basis during a specific period of time. And after that you pay back the amount you borrowed in installments. These are considered revolving lines of credit, so they're similar to credit cards in that you borrow what you need, you repay it, you borrow. Again, with home equity lines of credit, the money is borrowed as you need it.
Erin Levine [00:36:35]:
The interest rate is generally lower. I don't know how low these days. I don't think it's very low. It's better for when you are not sure how much you need to borrow or if you have ongoing expenses. We generally use it if we need to pay down a high interest construction loan or a credit card loan as opposed to a big buyout of our spouse. But here's where I've seen it be used and whether or not this is sound financial advice you'll want to ask, perhaps meet with one of our certified divorce financial analysts for 30 minutes or 1 hour session. Here's how I've been seeing it on our platform recently. So again, whether this is good financial advice or not, I don't know.
Erin Levine [00:37:19]:
But I've been seeing it a lot. What I've been seeing is one spouse take about $50,000 from a home equity line of credit and use that to pay their spouse a portion of what they're owed on the home. Then they take another $50,000 from somewhere else, like a 401k or maybe most of the credit card debt or something else, to give their spouse the full amount of what they're owed on the home. Now, that doesn't take their spouse off the mortgage. If their spouse is still on the mortgage, they're still going to have to refi that loan at some point down the road. It takes a very nice spouse who's willing to stay on that mortgage for a specific period of time. But if they agree to it, it is doable.
Erica Bennett [00:38:13]:
Yeah. And again, you guys, with any of these, we're not here to advise you. We're here to shine the light on some options because especially when it comes to finance, there are so many nuances of how you set the paperwork up to work in your favor. Your tax expert, your financial analyst, they're going to be able to make the right recommendation. But I will say nine times out of ten, me doing a little footwork ahead of time and coming in and say, hey, I've heard about this thing. Tell me what you think about this thing and could this be an option? You're collaborating together, but it definitely helps. I love that.
Erica Bennett [00:38:49]:
Yeah.
Erin Levine [00:38:51]:
We have several other options. They apply depending on where you are and what your station is in life. There are reverse mortgages. We can talk more about selling your home. In some cases, personal loans or credit cards could work. Home equity loans are different than home equity investments. So that is another strategy. The point is that I never want anyone to think I can't afford to refinance these days, and so I have no options.
Erin Levine [00:39:25]:
There are some options out there, and if it is something that you want to consider in your divorce, if you are thinking that you are going to be getting a divorce or you're in the throes of divorce, it is never too early to start considering what your options might be. And that is why I'm so proud that we're offering this resource right now. And thousands of people are taking us up on this offer. We have done literally no paid marketing, and we launched this tool less than two months ago and have had thousands of people using it and hundreds and hundreds of people taking up our offer of these free strategy calls. It clearly is resonating with people. And I think what surprised me the most is that with, Hello Divorce, we see a really wide range of people using the platform. We have people that don't even have $500 in their bank account at any point in time, and we have people with million-dollar estate. But what surprised me is that 85% of the people on our platform do have a home.
Erin Levine [00:40:27]:
So even people with relatively low incomes, even those people that are really struggling to meet ends meet, have a home, because a lot of these are long term marriages where they've worked really hard, and we want to make sure that they land right with this home, that they make a really smart decision around what they're going to do with it, and that it feels stable and it feels sound.
Erica Bennett [00:40:52]:
Yeah. And I love that because I think no matter where you're at in this divorce process, I think specifically a few months ago, I had gotten a call, somebody needed help and they were stuck in the ‘do I stay or do I go?’ They're in phase one, right? Like, I'm really unhappy. I've clarified what I need. I don't know that this person's ever going to change, and I don't know what to do. I was like, well, first you need to take care of yourself, right? She's not sleeping. She's not eating well. That just heightens your anxiety and your emotions.
Erica Bennett [00:41:24]:
And I'm like, can you go somewhere else and sleep for a few days? Just sleep, get some rest. And I said, then maybe, what about a separation? And she's like, I can't afford it. She's like, I can't afford rent right now, and we're tied into this mortgage and what am I supposed to do? And so it doesn't matter where you are in the process. It's about having access to the knowledge so that you feel better. Because that's the worst part. The unknown part is the worst part. And am I going to make the wrong decision? Is it going to have long term impact? And I feel so stuck and locked into where I'm at that I can't even get the space I need or the restart that I need.
Erica Bennett [00:42:04]:
And that's the beautiful part about you guys helping to do the work and to create these neutral experts that aren't tied to a bank. That aren't tied to a certain outcome that needs to happen. If this is interesting for you guys, if you are like, oh, my gosh, this is the information I needed. I've been trying to figure this out. I felt so locked in that I only had one or two options, right? Maybe your lawyer or your mortgage broker whose ever kind of said, like, hey, that's it. If you want to find out more Hello Divorce does offer a discovery call specific for real estate.
Erica Bennett [00:42:37]:
So, Erin, can you tell everybody a little bit more about what that call is like? And then you guys will have all the information, the link for you to sign up for that call, it'll be in the show notes, it'll be on the www.thecrazyexwivesclub.com, under the episodes where the full transcripts are. We'll make sure that you have the link. But what would they expect in that sort of a call?
Erin Levine [00:42:58]:
Yes, absolutely. Okay, so remember, there's two options for free calls. One is the 15 minutes call to discuss your divorce self and different paths to get you through that. The second is the real estate strategist call that is free. It's 30 minutes, and you will be chatting with a real estate strategist who's going to give you a better understanding of what options you have for your home and what options you have if you legally separate or divorce, and then determine what options you might qualify for to achieve your desired option, whether it be to sell, stay, buy out. But we'll walk you through all the different options that you might have and then determine a strategy to help you get there.
Erica Bennett [00:43:41]:
Yeah, I love that. And you guys, it's free. And that's not a joke. You don't have to sign up or do something else. It literally is about sharing the information. Because we all understand that being in the middle of contemplating divorce or in divorce, it sucks. It's hard enough already. It's stressful enough already.
Erica Bennett [00:43:58]:
To not make access to the information costs money or to make you jump through hoops. You can sign up for either of those free calls. Either the 15 minutes call on your divorce or the 30 minutes call specific to real estate. Again, it is free. And if you choose to move forward, there's also recommended vendors like people that you can say, okay, great. That option number one, that's the right option for me. Can you guys help me get there? And they'll help with that part, too. So, again, the link is in the show notes.
Erica Bennett [00:44:26]:
It's also in the full transcripts. This is such incredible work. I just want to thank you, Erin, and your team and everybody at Hello Divorce. Because I think this really is changing the landscape of what it looks like to get divorced. It's no longer information that's kept by a select few. It is something that you can do your research before so that you know what you're getting into so that you know, okay, what are my options on how I can move forward?
Erin Levine [00:44:52]:
Thank you so much. Yes, absolutely. And just for clarity, if you do choose an option, we will ensure that we make a direct introduction and ensure that the process is smooth between us and whatever vendor you choose and can also facilitate that choice getting into your divorce agreement. And if there are any issues surrounding it that still need to be worked out, we can bring in a mediator, a financial advisor, or a lawyer to help you resolve those things. All in one stop shop. And I hope you'll take advantage of that. Thanks so much for having me, Erica.
Erica Bennett [00:45:31]:
Yeah, thank you for joining us. You guys, it is www.hellodivorce.com if you guys want to learn more. Otherwise, head on over to the www.thecrazyexwivesclub.com. Over there you can shop for merch. You can check out when the next group coaching launches again, you guys, that twelve-week transformation, it gives you the roadmap to success to walk you through all three phases of divorce. And until next week, in our next episode, take care of yourself and go find something that sparks some joy in your day after we've had all this big conversation about real estate. Take care, you guys, and we'll talk to you soon. And that's it.
Erica Bennett [00:46:09]:
Another great episode of The Crazy Ex-Wives Club, a podcast for women learning how to heal from their divorce. Tune in next week for more advice and tips to help you figure out life after divorce. And until then, give yourself grace. Do the best you can and know that this is all part of the process.
