Divorce, refinancing gut check

[Anonymous]

Don't forget to budget for the therapy the kids due to the divorce. X4 will add up.

[Anonymous]

I would sell the house and split the profits with ex. You have way more freedom on how to use that money.

I have 3 kids and am renting a 4Bdr TH in Clarksburg/MD for $2600/month. Good public schools, walkable neighborhood, access to 2 pools. We have all we need.

[Anonymous]

Anonymous wrote:I am going through a divorce. He has agreed to let me buy him out of the house, sfh colonial style 4br in a good exurb school district where most homes are exorbitantly high or smaller split levels...so I believe the value will go up.
The rates are obviously high. I locked at 7.125% for a 30 yr conventional. I was approved but haven't closed yet... My monthly mortgage payment will go up by 1500. I'll still have over 20% equity in the home. This would put monthly mortgage at 3600. My salary is 149k. For the same mortgage I would not be able to get as good of a house in as good of a neighborhood, plus I'd like to keep my kids in the same schools.
Now I'm rethinking whether this is the best way to go. While my gross salary makes it all seem doable, I don't feel like I have an extra 1500 laying around per month??! (Finances are already split with stbxh)
Should I consider doing an ARM instead? Should I sell instead? Should I just plan to do more side hustling and get more income? (Not completely undoable - I did contract work before)
I don't know if this is even enough information to advise. I'm tired of thinking.

Wait, but there's a thread in the relationship forum right now saying that UMC people don't get divorced. I'm confused??

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am going through a divorce. He has agreed to let me buy him out of the house, sfh colonial style 4br in a good exurb school district where most homes are exorbitantly high or smaller split levels...so I believe the value will go up.
The rates are obviously high. I locked at 7.125% for a 30 yr conventional. I was approved but haven't closed yet... My monthly mortgage payment will go up by 1500. I'll still have over 20% equity in the home. This would put monthly mortgage at 3600. My salary is 149k. For the same mortgage I would not be able to get as good of a house in as good of a neighborhood, plus I'd like to keep my kids in the same schools.
Now I'm rethinking whether this is the best way to go. While my gross salary makes it all seem doable, I don't feel like I have an extra 1500 laying around per month??! (Finances are already split with stbxh)
Should I consider doing an ARM instead? Should I sell instead? Should I just plan to do more side hustling and get more income? (Not completely undoable - I did contract work before)
I don't know if this is even enough information to advise. I'm tired of thinking.

That's just your mortgage payment though. Lots of other expenses will increase in the coming years - inflation and just general rise in costs.
There will also be maintenance and upkeep for the house and now you will be responsible for those costs.
Hopefully you will get some child support but there will always be additional needs for the kids and your ex doesn't have to agree to cover them. Activities, classes, sports equipment, day camps, vacation, clothes, items for school and so on.
I am not saying it isn't doable, I am just saying to really consider all the costs. I think that you are hesitating bc you are already know about all the extra costs.
But as the sole owner of the home, if it does get to be too much you will be able to sell it.
You might want to really consider though if maybe now is the time to move since your kids aren't established in school yet. You may need to move further out and/or buy something smaller.

$3800 for 4 kids in a SFH is a GREAT amount to pay for housing. Moving is not going to put her in a better financial position. OP just said she can pick up an extra 40-50k in a side hustle and the last 2 kids will age out of full day care soon. She will be fine.

Meh it’s not that great for someone at her salary. She needs to consider a townhouse or a large condo.
Her kid isn’t only in K right now so it’s a great time to move.
Divorce really does change the average person’s finances and lifestyle 🤷‍♀️
It’s a waste of time and effort trying to pretend otherwise.

Not with 4 kids.

Of course this is doable with 4 kids. People do it all the time. Kids share rooms and a bathroom. Done.

She is not going to save significant money by moving. Let it go.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Op here again. Thanks everyone. I already feel like I put enough personal info to potentially be identified so I'll stop answering the requests for more details... But I can get a 5/5 ARM for 5.625% and bring down monthly payments $400. I'm inclined to go this route.

The idea to ask my parents to float some of the cash out (or perhaps maybe some of the college costs) is an interesting one... I will think about that too.

I could find a cheaper place to buy... townhouse with 3 br in a decent but not as good school district and save about 40k potentially... but in this home I also know many major things have been updated in the past five years. Roof and gutters, hvac, furnace, flooring, hot water heater...

I would do the arm and save the $400/month. I don't think the move is worth it to save $40k.

+1 especially given that her side hustle will bring her that income.

[Anonymous]

Anonymous wrote:I would sell the house and split the profits with ex. You have way more freedom on how to use that money.

I have 3 kids and am renting a 4Bdr TH in Clarksburg/MD for $2600/month. Good public schools, walkable neighborhood, access to 2 pools. We have all we need.

You have no asset just blow your money. OP can pay off mortgage and rent her house while moving to a cheaper COLA area. My DC house brings $10k/month in rent it’s a whole pension plan

[Anonymous]

The ARM sounds like a decent choice, OP. Your net increase, if I'm reading correctly, is $1200/month or $14.4K per year. What's the house worth, and do you think it will continue to appreciate 10-20K per year? Could you change jobs and get a raise to cover that difference? You can also refinance if/when rates fall. In 5 years when the ARM resets your life will probably look different, kids will be older, you may have different priorities, you may have a different job. It's a risk but I'd do that before moving. A move will cost you thousands no matter what.

[Anonymous]

Anonymous wrote:The ARM sounds like a decent choice, OP. Your net increase, if I'm reading correctly, is $1200/month or $14.4K per year. What's the house worth, and do you think it will continue to appreciate 10-20K per year? Could you change jobs and get a raise to cover that difference? You can also refinance if/when rates fall. In 5 years when the ARM resets your life will probably look different, kids will be older, you may have different priorities, you may have a different job. It's a risk but I'd do that before moving. A move will cost you thousands no matter what.

+1

[Anonymous]

Have not read other responses. Sell the house now.

- divorce attorney

[Anonymous]

Anonymous wrote:Have not read other responses. Sell the house now.

- divorce attorney

This is why you never take advice from an “attorney” posting here. Can’t even bother to read the thread and but thinks it’s worthy to post bad advice.

[Anonymous]

Anonymous wrote:Don't forget to budget for the therapy the kids due to the divorce. X4 will add up.

The anti divorce troll is active today. Don’t your kids need you to homeschool them?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Well maybe the structure is all done and baked but usually you’d expect some opportunity for both sides to structure things ok— maybe he keeps his retirement accounts in exchange for selling the house cheap, or maybe she could give him some of her/ borrow against hers to buy it out.

Op again - I did negotiate down the buyout amount in exchange for retirement so he's not getting 50% of the equity - we agreed on a set dollar amount. IMHO he is still winning out financially but it is at a level I was willing to live with.

I don’t think you have any great options here, and this is very common for women who don’t want to give their marital house, but I fear this will be a mistake in the long term. You said the appraisals for the house were high. You are trading an asset (real estate) that is valued at the top of the market for assets (stocks) that are devalued right now. It is much more likely that the value of the house will remain stagnant and the stocks will increase in value over the long term, especially vis a vis inflation. Meanwhile, you’ll be spending all your $$ paying interest & maintaining the house & growing very little equity over the course of your new mortgage & not saving for your own retirement. Not to mention 3 more college tuitions. So many women trade long term retirement security for maintaining their short term standard of living and live to regret it for many, many years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Well maybe the structure is all done and baked but usually you’d expect some opportunity for both sides to structure things ok— maybe he keeps his retirement accounts in exchange for selling the house cheap, or maybe she could give him some of her/ borrow against hers to buy it out.

Op again - I did negotiate down the buyout amount in exchange for retirement so he's not getting 50% of the equity - we agreed on a set dollar amount. IMHO he is still winning out financially but it is at a level I was willing to live with.

I don’t think you have any great options here, and this is very common for women who don’t want to give their marital house, but I fear this will be a mistake in the long term. You said the appraisals for the house were high. You are trading an asset (real estate) that is valued at the top of the market for assets (stocks) that are devalued right now. It is much more likely that the value of the house will remain stagnant and the stocks will increase in value over the long term, especially vis a vis inflation. Meanwhile, you’ll be spending all your $$ paying interest & maintaining the house & growing very little equity over the course of your new mortgage & not saving for your own retirement. Not to mention 3 more college tuitions. So many women trade long term retirement security for maintaining their short term standard of living and live to regret it for many, many years.

+1. I read somewhere that this is the biggest financial mistake women make when divorcing. Anyone reading this- sell the house, keep your retirement assets, and downsize.

[Anonymous]

OP, this makes no sense. Assuming you have shared custody, you are going to not have help on the days you have the kids and with 3 kids at home, they will need a lot of help/attention and those other days you'll need to get other things done so a second job may not be realistic. Move where you can afford. It's not just the mortgage but repairs, property taxes that can go up, etc. Get a small house and put the money away.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Have not read other responses. Sell the house now.

- divorce attorney

This is why you never take advice from an “attorney” posting here. Can’t even bother to read the thread and but thinks it’s worthy to post bad advice.

What in the thread added to the original post that makes this bad advice?