Divorce, refinancing gut check

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op here. Thank you all for weighing in again and your questions. Our income is about even and won't be getting much in the way of child support but he is going to pay split the daycare/health expenses. (2 youngest in inexpensive daycare, 1 will be entering kindergarten next year)

It's possible he would agree to a payment plan... I may need to resort to that. But I am loathe to stay financially beholden and tied to him for various reasons including that this becomes a point of coercion and control for him. This is why I'm in a rush to financially separate cleanly (not assume the loan or stay under the joint mortgage, etc). While legally we are doing this "amicably" it is very much not amicable emotionally or psychologically.

Interesting idea to try to cash out more for myself... I could potentially do that. I just saw the appraisal and they oddly appraised the home super high. But then the monthly payments would go even higher...

What is the value of the house? A very shitty rental 2br/2baths apartment is $2800 at a minimum in central DC. I don't think he would agree to you paying him mortgage: it increases his taxable income. And believe me you DON'T want a former spouse on the mortgage and title (he will be a fool to agree only be on the mortgage).

I disagree that interest rates would not go down: it's no longe 1980s the Feds are much more efficiently regulating now. I did 7/1 ARM under 2% for my mortgage and will just prepay in 7 years if it goes up. But I make way more that you (350k gross)

Another question from me: does the house have basement area? I would recommend taking some cash out refinance and converting it into airbnb rental. It will cover your mortgage at 100% plus property taxes

[Anonymous]

Anonymous wrote:Op here. Thank you all for weighing in again and your questions. Our income is about even and won't be getting much in the way of child support but he is going to pay split the daycare/health expenses. (2 youngest in inexpensive daycare, 1 will be entering kindergarten next year)

It's possible he would agree to a payment plan... I may need to resort to that. But I am loathe to stay financially beholden and tied to him for various reasons including that this becomes a point of coercion and control for him. This is why I'm in a rush to financially separate cleanly (not assume the loan or stay under the joint mortgage, etc). While legally we are doing this "amicably" it is very much not amicable emotionally or psychologically.

Interesting idea to try to cash out more for myself... I could potentially do that. I just saw the appraisal and they oddly appraised the home super high. But then the monthly payments would go even higher...

Do not leave him on the mortgage. If he has controlling tendencies, a higher interest rate is worth not being tied financially to him. It’s a leap of faith but will be worth it in the end.

[Anonymous]

If you think the appraisal was too high, you should get a couple more. It’s possible you’re not getting a fair appraisal

[Anonymous]

Can you do a quitclaim deed and ask the lender to release him from the mortgage as part of the divorce so you can keep your current loan?

[Anonymous]

OP, it sounds like you are unsure of what to do about housing but you are sure that you want to separate from him financially.

Based on the above, I would recommend refinancing into a 3 or 5 year ARM.

You get a lower rate and your "additional" monthly payment is lower than $1500 (this is the figure you mentioned for a 30 year loan).

You are effectively buying yourself 3 or 5 years time to think about what you would like to do and see how your money situation is. While you wait, your kids stay in the same school system, stay in the same house and you see what kind of time you have to do your side hustles. During this time, you can set aside $1500/month, instead of the lower monthly payment on a 3 or 5 year ARM (let's say it is $1200 for example), and you can see the impact that it has on your budget. You can set aside that extra $300 into a savings account for emergencies or use it to refinance again if and when rates go down. By the way, no one knows what is going to happen with rates so don't let anyone convince you that rates are going up or down.

Most people's financial situation improves over time so you may be in a better financial position 3-5 years out and that may improve your outlook on what to do.

Hope that helps!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op here. Thank you all for weighing in again and your questions. Our income is about even and won't be getting much in the way of child support but he is going to pay split the daycare/health expenses. (2 youngest in inexpensive daycare, 1 will be entering kindergarten next year)

It's possible he would agree to a payment plan... I may need to resort to that. But I am loathe to stay financially beholden and tied to him for various reasons including that this becomes a point of coercion and control for him. This is why I'm in a rush to financially separate cleanly (not assume the loan or stay under the joint mortgage, etc). While legally we are doing this "amicably" it is very much not amicable emotionally or psychologically.

Interesting idea to try to cash out more for myself... I could potentially do that. I just saw the appraisal and they oddly appraised the home super high. But then the monthly payments would go even higher...

Do not leave him on the mortgage. If he has controlling tendencies, a higher interest rate is worth not being tied financially to him. It’s a leap of faith but will be worth it in the end.

Not to be harsh, but why did you have 4 children with a man who causes emotional and psychological harm? Did you have any indication of this before the 4 children were born?

[Anonymous]

Anonymous wrote:Can you do a quitclaim deed and ask the lender to release him from the mortgage as part of the divorce so you can keep your current loan?

But she needs money to pay him out of his share of the house. That's why she is doing a cash out refinance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op here. Thank you all for weighing in again and your questions. Our income is about even and won't be getting much in the way of child support but he is going to pay split the daycare/health expenses. (2 youngest in inexpensive daycare, 1 will be entering kindergarten next year)

It's possible he would agree to a payment plan... I may need to resort to that. But I am loathe to stay financially beholden and tied to him for various reasons including that this becomes a point of coercion and control for him. This is why I'm in a rush to financially separate cleanly (not assume the loan or stay under the joint mortgage, etc). While legally we are doing this "amicably" it is very much not amicable emotionally or psychologically.

Interesting idea to try to cash out more for myself... I could potentially do that. I just saw the appraisal and they oddly appraised the home super high. But then the monthly payments would go even higher...

Do not leave him on the mortgage. If he has controlling tendencies, a higher interest rate is worth not being tied financially to him. It’s a leap of faith but will be worth it in the end.

Not to be harsh, but why did you have 4 children with a man who causes emotional and psychological harm? Did you have any indication of this before the 4 children were born?

Quit it. Stay on topic.

[Anonymous]

Anonymous wrote:If you think the appraisal was too high, you should get a couple more. It’s possible you’re not getting a fair appraisal

What is the benefit of getting additional appraisals?

If it comes in lower, that works against OP. Plus she has to pay probably around $1k for each additional appraisal.

If it comes in higher, I guess that is better but how much higher does the appraisal need to be to cover a few thousand dollars extra to run these extra appraisals?

Not worth it.

[Anonymous]

Anonymous wrote:OP, it sounds like you are unsure of what to do about housing but you are sure that you want to separate from him financially.

Based on the above, I would recommend refinancing into a 3 or 5 year ARM.

You get a lower rate and your "additional" monthly payment is lower than $1500 (this is the figure you mentioned for a 30 year loan).

You are effectively buying yourself 3 or 5 years time to think about what you would like to do and see how your money situation is. While you wait, your kids stay in the same school system, stay in the same house and you see what kind of time you have to do your side hustles. During this time, you can set aside $1500/month, instead of the lower monthly payment on a 3 or 5 year ARM (let's say it is $1200 for example), and you can see the impact that it has on your budget. You can set aside that extra $300 into a savings account for emergencies or use it to refinance again if and when rates go down. By the way, no one knows what is going to happen with rates so don't let anyone convince you that rates are going up or down.

Most people's financial situation improves over time so you may be in a better financial position 3-5 years out and that may improve your outlook on what to do.

Hope that helps!

Op here. Thank you. This does help a lot.
I find all the questions helpful.
I think I could side hustle in about 40-50k a year. It'll mean I'll have to pay a greater portion of the children's expenses but I believe would still be worth it because more cash is better than less cash...
My worry about the ARM is just the whole "this is what caused the housing bubble" trauma of 2008 and worry that rates will just go UP instead... but that is a good point about financial situation improving over time, plus child care expenses would go down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Can you do a quitclaim deed and ask the lender to release him from the mortgage as part of the divorce so you can keep your current loan?

But she needs money to pay him out of his share of the house. That's why she is doing a cash out refinance.

But can she do what PP said above, then take out a HELOC to payout her ex?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Op here. Thank you all for weighing in again and your questions. Our income is about even and won't be getting much in the way of child support but he is going to pay split the daycare/health expenses. (2 youngest in inexpensive daycare, 1 will be entering kindergarten next year)

It's possible he would agree to a payment plan... I may need to resort to that. But I am loathe to stay financially beholden and tied to him for various reasons including that this becomes a point of coercion and control for him. This is why I'm in a rush to financially separate cleanly (not assume the loan or stay under the joint mortgage, etc). While legally we are doing this "amicably" it is very much not amicable emotionally or psychologically.

Interesting idea to try to cash out more for myself... I could potentially do that. I just saw the appraisal and they oddly appraised the home super high. But then the monthly payments would go even higher...

Do not leave him on the mortgage. If he has controlling tendencies, a higher interest rate is worth not being tied financially to him. It’s a leap of faith but will be worth it in the end.

Not to be harsh, but why did you have 4 children with a man who causes emotional and psychological harm? Did you have any indication of this before the 4 children were born?

Quit it. Stay on topic.

Thank you. OP again. It took me many years to realize this isn't a marriage worth staying in anymore, and he's made it very traumatizing to leave but I am luckier than most in that I have work. I am just not sure whether I'm making the right move on the house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can you do a quitclaim deed and ask the lender to release him from the mortgage as part of the divorce so you can keep your current loan?

But she needs money to pay him out of his share of the house. That's why she is doing a cash out refinance.

But can she do what PP said above, then take out a HELOC to payout her ex?

OP here... this is an interesting idea I hadn't considered. I'll look more into this.

[Anonymous]

With child care costs and college costs and activities and other basic needs, this sounds way to high.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can you do a quitclaim deed and ask the lender to release him from the mortgage as part of the divorce so you can keep your current loan?

But she needs money to pay him out of his share of the house. That's why she is doing a cash out refinance.

But can she do what PP said above, then take out a HELOC to payout her ex?

OP here... this is an interesting idea I hadn't considered. I'll look more into this.

I don't think he would agree to quit claim the house with a delayed HELOC payout. It's always done as one transaction in settlement. If OP is already approved for refinancing they probably already signed MSA and it's final. Bank won't give her funds without marital settlement agreement