amanda123 Posted January 6, 2016 Share Posted January 6, 2016 (edited) A friend of mine is getting divorced and petition is already filed. They have a mortgage around 50k to pay off. She wants to sell the house and get paid her half. He wants to lock the mortgage into a 3 year fixed. I suppose they could sell even with the fix but it would be on trust with him agreeing to selling in the near future. Should she use her LOC to save penalties and to have the freedom to sell now. Edited April 8, 2016 by a LoveShack.org Moderator Link to post Share on other sites
Mr. Lucky Posted January 6, 2016 Share Posted January 6, 2016 Pretty technical question, maybe others with more financial insight can address the logistics. But if I understand you, she's thinking of borrowing to pay off the mortgage on the supposition that, when the house sells in 3 years, her H would pay her back? Would she hold a note for the obligation? Would he make payments to her in the interim? If they had that level of trust between them, they'd probably not be divorcing. I'd want to be cashed out now... Mr. Lucky Link to post Share on other sites
carhill Posted January 6, 2016 Share Posted January 6, 2016 How quickly are comps selling in their area? Can they bifurcate, doing the D now with an agreement to settle the community property at some future date? If they've got a cooling-off on the D, and if the market isn't dead, I'd push to sell, pay the mortgage off in escrow and split the proceeds per whatever the order stipulates. Clean and done. Generally, if dissolution has been filed, it'll come up in a legal search and mortgagors can be iffy about that kind of stuff, especially with all the folks who walked away from loans a few years back. IMO, too many scenarios for a brief analysis on an internet forum. If there's a goodly amount of equity at stake, I'd run it past a professional, including a family law lawyer. Link to post Share on other sites
bilski04 Posted January 6, 2016 Share Posted January 6, 2016 if he wants the house and to get a low mortgage rate, why doesnt he take out a mortgage and refinance for remaining amount of $50k plus her 1/2 of house equity value under his name only and pay her off thus getting her off the mortgage and deed. Like others have said if they could get along and trust each other they wouldnt be getting divorced. Link to post Share on other sites
carhill Posted January 6, 2016 Share Posted January 6, 2016 That's one strategy but it depends on a loan originator lending to someone in the middle of a lawsuit with unknown outcome and what kind of equity is at stake. The numbers are everything. My exW and I did this stuff (mortgage wrangling) on our properties *before* we filed for divorce when we looked golden to lenders. Of course, jurisdictions and lenders vary. I suggested the strategy on advice from my lawyer. Worked out well. Link to post Share on other sites
loveboid Posted January 6, 2016 Share Posted January 6, 2016 He should buy her out now. He could buy her out with a cash out refinancing of his equity and do a fixed of the new mortgage total then. Otherwise they should sell. He's trying to use her equity to save himself some mortgage interest? No way. It's her money. She gets it now. Link to post Share on other sites
bilski04 Posted January 7, 2016 Share Posted January 7, 2016 "He's trying to use her equity to save himself some mortgage interest? No way. " ^^ this Link to post Share on other sites
Miss Peach Posted January 13, 2016 Share Posted January 13, 2016 I would highly recommend separating everything. It should be easy to buy her out if HE is refinancing. If he needs her to do the transaction she shouldn't do it. The banks do not care what the divorce decree says; only who signed the loan. Link to post Share on other sites
William Posted January 14, 2016 Share Posted January 14, 2016 Well, folks, it appears this new member posted this up, logged out exactly that minute of the clock and never came back so, instead of posting great ideas into the abyss, I'll close this up and we'll focus on other things. Link to post Share on other sites
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