keep the house after divorce? financial advisor?

[Reburn]

Seems some of advice here is missing or underestimating the on going value in that 2.5% interest loan.

I think everyone understands the value of the interest rate. But, to the best of my knowledge you can not just remove someone off a loan. I have always seen it require a new loan. Wether it be a car of a house. I think you would agree sharing an asset legally on paper with someone you are trying to get away from is a horrible idea.

 

[Boarmaster]

I think everyone understands the value of the interest rate. But, to the best of my knowledge you can not just remove someone off a loan. I have always seen it require a new loan. Wether it be a car of a house. I think you would agree sharing an asset legally on paper with someone you are trying to get away from is a horrible idea.

So before I just abandoned the idea of keeping the house and low interest loan I would talk to my attorney about what avenues there are for getting her off the deed and getting her released from the mortgage. I would ask the bank for a mortgage assignment from my wife and me to me. A quit claim deed would get her off the ownership. She sure isn't going to agree to that if she isn't off the loan.

This may not be easy as the bank probably isn't too motivated to continue on with that low interest loan. If it doesn't work out then it doesn't work out. But I would know all my legal and banking avenues before tossing in the towel.

I do agree that I would not want to be partners with my ex, not in anyway shape or form. If that is the only option then I would be looking for a new house.

 

[KenLee]

So before I just abandoned the idea of keeping the house and low interest loan I would talk to my attorney about what avenues there are for getting her off the deed and getting her released from the mortgage. I would ask the bank for a mortgage assignment from my wife and me to me. A quit claim deed would get her off the ownership. She sure isn't going to agree to that if she isn't off the loan.

This may not be easy as the bank probably isn't too motivated to continue on with that low interest loan. If it doesn't work out then it doesn't work out. But I would know all my legal and banking avenues before tossing in the towel.

I do agree that I would not want to be partners with my ex, not in anyway shape or form. If that is the only option then I would be looking for a new house.

Bank is losing $ on the loan as is. Why would they want to help and have one person on the hook vs 2 ?

 

[Reburn]

Bank is losing $ on the loan as is. Why would they want to help and have one person on the hook vs 2 ?

You also have to remember that loan has likely been packaged and sold a couple times and is owned by a different company then the place it orginated at. Changing who is on the loan and how much its for requires it be underwritten again.

 

[Chase0109]

Having just gone through a similar situation with my divorce/mortgage assumption I feel for your friend!

To answer your question, personally, I would say unless your buddy has a very large income and can be on great terms with his ex he’s gonna have to sell and split profits with her.

I kept my house and bought my ex out of her half. But that requires a number of things to even be possible. First to keep current interest rate the only option is for his current mortgage company to allow him to assume the mortgage in his name. That’s the only legal way to get her name off the current mortgage. Of course he can refi in his name alone, but then you lose the 2.5% interest rate.

I wanted to keep my 2.625% interest rate on my mortgage. My mortgage company allowed me to assume the Mortgage on my house. It took 9 months start to finish, $5000 worth of closing cost, another $1000 appraisal, not to mention a boatload of paperwork and proving my income/assets many times over, plus more stress/frustration than I’ve ever dealt with in my entire life!

Remember, if he wants to assume the mortgage he has to prove he has enough income to pay the mortgage plus all of his other bills all on his own. This often times is pretty difficult to do.

Thankfully, me and my ex are still very close friends (talk daily). If we weren’t, there is no way this would’ve worked for us. Like I said it took 9 months start to finish and then at the end I still had to pay her out her share of equity, 210K. She was extremely patient during the process, which I am very grateful for! If we weren’t on good terms, there’s no way this ever would’ve worked.

Based on personal experience, I’d say he has to answer three questions. Each one needs to be a yes, or it won’t happen.
1. Will the current mortgage company allow a mortgage assumption?
2. Is the X willing to be patient and wait (could be almost a year) for the Mortgage assumption to happen before being paid her equity?
3. Is the X willing to sign the divorce decree agreeing to the mortgage assumption and payoff with a long timeframe?

If he isn’t attached to the house and is looking at it as just a rental, plan to sell and avoid all the stress and headache of trying to keep it. Then go buy something else.