Refinance home to buy spouse out?

Rough-Area4765 · 2022-02-05T21:54:35+00:00

Went through this last year. Do you have enough equity in the house? I had enough equity to refinance the house, take on the original mortgage plus her half of the equity into a new mortgage. Quite claim deed signed by her and as soon as refinance was done, she got the check for her half of the equity.

If you don’t have enough equity, then it will be the mortgage balance plus extra on top to buy her out which doesn’t make sense at all to do.

Example with my number: Original mortgage balance $300k. House appraised at $600k. New mortgage for $450k in my name only. She gets a $150k check.

Gattsama · 2022-02-06T13:13:01+00:00

You actually have two options. A refinance or an assumption loan. Both require you to apply for and be approved for a new loan.

The refinance is just that. A new 30y vs 15y vs 5/1 loan. You have closing costs and fess (which can be rolled into the loan). And you start the clock back at zero. But you might get a lower interest rate and in theory you only need to refinance the current remain balance, so could get a much lower month payment too.

An assumption loan you assume the current loan. You keep the current interest rate, time paid and end date (ie no lost time). But you still have closing costs and fees (because it's a new loan) which you have to pay out of pocket. You assume the current loan payment at it's current rate.

Both loans have their pluses and minus. Either way you have yo pay her her half of the equity. You can do that with actually cash if you got it, a disproportionate distribution of other assets, assuming disproportionate additional debt, refinancing at a higher value or a combination of thr above. The courts only care that the net distribution is 50/50, not that every asset is spilt evenly.

Talk to a professional banker or CDFA about this. There are a lot of factors. Ultimately if you do not have the cash to buy her out you can give up more assets or take more debt, that's normally a better option then refinancing at a higher balance (rising your monthly payments and starting the clock over again).

RedPillLense · 2022-02-06T19:59:17+00:00

Careful with the now plunging real estate market.

RepresentativeOk5968 · 2022-02-09T00:32:05+00:00

I went through this last year. I bought her out of her portion of the equity and kept and still live in the house. There was no reason for her to stay in it, she had moved back in with her mom. And my job is in town so I didn't need or want to move. I had it written into the divorce decree that she signed over her portion of the house to me. A few months later I also refinanced to get a lower rate so my mortgage is even less now.

Title	Refinance home to buy spouse out?
Author	Tricky-Attention-466
Upvotes	2
Comments	15
Date	February 5, 2022 9:49 PM UTC (4 years ago)
Subreddit	Posted in /r/Divorce_Men
Original Link	https://old.reddit.com/r/Divorce_Men/comments/slhpiz/refinance_home_to_buy_spouse_out/
Archive Link	https://theredarchive.com/r/Divorce_Men/refinance-home-to-buy-spouse-out.1099548 https://theredarchive.com/post/1099548

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