Divorce, refinancing gut check

[Anonymous]

Op here again. I just changed lenders and loan terms at the last minute...I need to have the home reappraised and get reapproved but I don't see why I wouldn't, since I just got approved with the other lender. This oen is 30 year fixed at 5.75 but buying it down with points (2.835)... Still this lender was able to get my monthly payments down about even on the P&I as the ARM amount. The APR is higher, total interest percentage is higher... but I think this meets my needs for now. (Oddly they estimated the T&I/escrow part to be higher than my other lender, so overall monthly payment looks lower. by $75 too..) I still feel a little unsure about whether this is the right move but feel that it probably still is a decent calculated risk. And I could still refi later if rates drop further again.
For people suggestion assumption... assuming the existing loan won't work for me (it's VA so he would have to give up that entitlement and there's just no way that's happening)
Time to go drum up that side hustle work...

[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?

I doubt they are all his. One is in college and two are in daycare ....

What? My sibling has a 26 year old and a 10 year old, with two kids in between, all with the same spouse.

[Anonymous]

An ARM is a really bad idea as you never own the house and just pay interest. You are getting really bad long term advice.

[Anonymous]

Anonymous wrote:You need a better lawyer. My old neighbor got divorced when kids young and agreement was he would pay 100 percent of cost of house taxes, insurance till youngest kid 21. She would do repairs. At that town house sold and split.

She also could only work part time till youngest 18 as such he made up difference.

She also got half of money.

But he paid no alimony and the deal ended in 2021 that started in 2008 and lucky him house shot up in value

They both won.

Or my wife’s friend used the huge rock on the back approach. She quit work. Hit the gym, got new clothes, new makeover, then he left her as could not handle Rock. She took him to cleaners and remarried rich

If they have 50-50 custody and equal income this isn't going to happen.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You need a better lawyer. My old neighbor got divorced when kids young and agreement was he would pay 100 percent of cost of house taxes, insurance till youngest kid 21. She would do repairs. At that town house sold and split.

She also could only work part time till youngest 18 as such he made up difference.

She also got half of money.

But he paid no alimony and the deal ended in 2021 that started in 2008 and lucky him house shot up in value

They both won.

Or my wife’s friend used the huge rock on the back approach. She quit work. Hit the gym, got new clothes, new makeover, then he left her as could not handle Rock. She took him to cleaners and remarried rich

If they have 50-50 custody and equal income this isn't going to happen.

+1 this is an unrealistic outcome in most divorces

[Anonymous]

Anonymous wrote:Op here again. I just changed lenders and loan terms at the last minute...I need to have the home reappraised and get reapproved but I don't see why I wouldn't, since I just got approved with the other lender. This oen is 30 year fixed at 5.75 but buying it down with points (2.835)... Still this lender was able to get my monthly payments down about even on the P&I as the ARM amount. The APR is higher, total interest percentage is higher... but I think this meets my needs for now. (Oddly they estimated the T&I/escrow part to be higher than my other lender, so overall monthly payment looks lower. by $75 too..) I still feel a little unsure about whether this is the right move but feel that it probably still is a decent calculated risk. And I could still refi later if rates drop further again.
For people suggestion assumption... assuming the existing loan won't work for me (it's VA so he would have to give up that entitlement and there's just no way that's happening)
Time to go drum up that side hustle work...

Sounds like a good plan.

[Anonymous]

Anonymous wrote:You need a better lawyer. My old neighbor got divorced when kids young and agreement was he would pay 100 percent of cost of house taxes, insurance till youngest kid 21. She would do repairs. At that town house sold and split.

She also could only work part time till youngest 18 as such he made up difference.

She also got half of money.

But he paid no alimony and the deal ended in 2021 that started in 2008 and lucky him house shot up in value

They both won.

Or my wife’s friend used the huge rock on the back approach. She quit work. Hit the gym, got new clothes, new makeover, then he left her as could not handle Rock. She took him to cleaners and remarried rich

You can’t compare cases like this. See bolded word. Some people agree to far more than they need to - many don’t.

[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)

Could he deduct such amount from child support? Surely your attorneys could come up with a settlement agreement that specifies this arrangement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You need a better lawyer. My old neighbor got divorced when kids young and agreement was he would pay 100 percent of cost of house taxes, insurance till youngest kid 21. She would do repairs. At that town house sold and split.

She also could only work part time till youngest 18 as such he made up difference.

She also got half of money.

But he paid no alimony and the deal ended in 2021 that started in 2008 and lucky him house shot up in value

They both won.

Or my wife’s friend used the huge rock on the back approach. She quit work. Hit the gym, got new clothes, new makeover, then he left her as could not handle Rock. She took him to cleaners and remarried rich

You can’t compare cases like this. See bolded word. Some people agree to far more than they need to - many don’t.

I've found that people who agree to more than they need to are usually the one who is trying to leave the marriage. In this case I (op) am the one trying to leave.

[Anonymous]

Anonymous wrote:An ARM is a really bad idea as you never own the house and just pay interest. You are getting really bad long term advice.

You are confusing ARM with interest only mortgages. ARM does have principal component

[Anonymous]

Anonymous wrote:What is your current interest rate?

When my ExDH and I separated he let me remain in the house and keep our low interest rate (left his name in the mortgage) and paid him cash directly for the difference (was $100 so doable). Neither one of us wanted to spend money on interest that could be used to support the kids/save for college. Maybe if you phrase it that way you wouldn’t have to refinance? There’s no “rule” that says you must refinance in divorce.[/quote

This.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Keep the house. Do the ARM

I got divorced in 2020 when there was no housing. I stupidly listened to conventional advice (a woman should never keep the house in a divorce .... it is a huge financial mistake)

On the contrary...not keeping the house has been the biggest financial mistake of my life.

My ex kept it. He did not buy me out of the full 50%. He now has 400k more equity because the value of the home went up about 400k during covid.

I bought another house, not at all comparable, for more money in 2021. This house is 5 min away but not in the school zone. I could not find housing in the school zone. I also have had major unforeseen maintanece and repair issues...I had an inspection. I have spent 17k in repairs since I bought and now have to spend 20k more. I could not sell my house now without making these repairs. I am paying more for less house and now have these major additional expenses. I essentially had to start over, pay more while my ex kept the house, gained equity and did nothing.

I considered trying to keep the house but my divorce attorney talked me out of it. Biggest mistake of my life.

I have also paid moving costs, closing costs and furniture costs that are not in the figures above. it would have been cheaper or me to rent at 4k a month at this point.

Moving to the unknown can really cost you. Keep the house and do the ARM. Refi later or move before the term ends.

Do you really think the real estate market in 2023-2024 is going to see the stratospheric value increases seen in 2020-2022? If you do, you’re the only person in the US who does. OP is making the mirror image of your mistake. She’ll be paying the inflated 2022 price to her soon to be ex and watching her value drop, or at best, stagnate.

Of course not. But buying now is not ideal. She will pay more for less. Better to stay and sell years from now than buy another property.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Keep the house. Do the ARM

I got divorced in 2020 when there was no housing. I stupidly listened to conventional advice (a woman should never keep the house in a divorce .... it is a huge financial mistake)

On the contrary...not keeping the house has been the biggest financial mistake of my life.

My ex kept it. He did not buy me out of the full 50%. He now has 400k more equity because the value of the home went up about 400k during covid.

I bought another house, not at all comparable, for more money in 2021. This house is 5 min away but not in the school zone. I could not find housing in the school zone. I also have had major unforeseen maintanece and repair issues...I had an inspection. I have spent 17k in repairs since I bought and now have to spend 20k more. I could not sell my house now without making these repairs. I am paying more for less house and now have these major additional expenses. I essentially had to start over, pay more while my ex kept the house, gained equity and did nothing.

I considered trying to keep the house but my divorce attorney talked me out of it. Biggest mistake of my life.

I have also paid moving costs, closing costs and furniture costs that are not in the figures above. it would have been cheaper or me to rent at 4k a month at this point.

Moving to the unknown can really cost you. Keep the house and do the ARM. Refi later or move before the term ends.

Do you really think the real estate market in 2023-2024 is going to see the stratospheric value increases seen in 2020-2022? If you do, you’re the only person in the US who does. OP is making the mirror image of your mistake. She’ll be paying the inflated 2022 price to her soon to be ex and watching her value drop, or at best, stagnate.

Of course not. But buying now is not ideal. She will pay more for less. Better to stay and sell years from now than buy another property.

She doesn’t have to buy immediately. Rent & wait until next year & see what happens to the market. Unless at least one of the partners is wealthy, trying to sustain two households vs. one requires compromises. Too many women compromise their future to try to avoid changing their current lifestyle. The real mistake pp made was not giving up her marital house, it was trying to replace it kind. Of course you should keep the house if you’re just going to go out and buy an equally expensive one. And as pp discovered, a “cheaper” house isn’t “cheaper” if the price is lower because it needs a ton of immediate work. Of all the options, that’s the dumbest. These women get divorced, but want to pretend that nothing’s really changed. It doesn’t work, and it’s an expensive delusion.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Keep the house. Do the ARM

I got divorced in 2020 when there was no housing. I stupidly listened to conventional advice (a woman should never keep the house in a divorce .... it is a huge financial mistake)

On the contrary...not keeping the house has been the biggest financial mistake of my life.

My ex kept it. He did not buy me out of the full 50%. He now has 400k more equity because the value of the home went up about 400k during covid.

I bought another house, not at all comparable, for more money in 2021. This house is 5 min away but not in the school zone. I could not find housing in the school zone. I also have had major unforeseen maintanece and repair issues...I had an inspection. I have spent 17k in repairs since I bought and now have to spend 20k more. I could not sell my house now without making these repairs. I am paying more for less house and now have these major additional expenses. I essentially had to start over, pay more while my ex kept the house, gained equity and did nothing.

I considered trying to keep the house but my divorce attorney talked me out of it. Biggest mistake of my life.

I have also paid moving costs, closing costs and furniture costs that are not in the figures above. it would have been cheaper or me to rent at 4k a month at this point.

Moving to the unknown can really cost you. Keep the house and do the ARM. Refi later or move before the term ends.

Do you really think the real estate market in 2023-2024 is going to see the stratospheric value increases seen in 2020-2022? If you do, you’re the only person in the US who does. OP is making the mirror image of your mistake. She’ll be paying the inflated 2022 price to her soon to be ex and watching her value drop, or at best, stagnate.

Of course not. But buying now is not ideal. She will pay more for less. Better to stay and sell years from now than buy another property.

She doesn’t have to buy immediately. Rent & wait until next year & see what happens to the market. Unless at least one of the partners is wealthy, trying to sustain two households vs. one requires compromises. Too many women compromise their future to try to avoid changing their current lifestyle. The real mistake pp made was not giving up her marital house, it was trying to replace it kind. Of course you should keep the house if you’re just going to go out and buy an equally expensive one. And as pp discovered, a “cheaper” house isn’t “cheaper” if the price is lower because it needs a ton of immediate work. Of all the options, that’s the dumbest. These women get divorced, but want to pretend that nothing’s really changed. It doesn’t work, and it’s an expensive delusion.

Well, *this* Op isn't "pretending nothing's really changed." Obviously I'll still be paying 1200 more per month which is not an insignificant amount and I have strategies for dealing with it, but yes it is all a risk. Sure selling and cashing out then renting is less of a risk, but it's also a possible missed opportunity to build wealth over the long haul which ALSO could screw over "these divorced women" - which I have also seen happen and would like to avoid.

So I think it's all about taking a calculated risk and reducing the potential for things to go completely awry right? But yes, divorce is a financial hit. I feel fortunate that at least I have a good stable job with amazing benefits.

I think this thread has probably run its course... thank you everyone who weighed in, including the naysayers. Maybe I'll report back in a couple years...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Keep the house. Do the ARM

I got divorced in 2020 when there was no housing. I stupidly listened to conventional advice (a woman should never keep the house in a divorce .... it is a huge financial mistake)

On the contrary...not keeping the house has been the biggest financial mistake of my life.

My ex kept it. He did not buy me out of the full 50%. He now has 400k more equity because the value of the home went up about 400k during covid.

I bought another house, not at all comparable, for more money in 2021. This house is 5 min away but not in the school zone. I could not find housing in the school zone. I also have had major unforeseen maintanece and repair issues...I had an inspection. I have spent 17k in repairs since I bought and now have to spend 20k more. I could not sell my house now without making these repairs. I am paying more for less house and now have these major additional expenses. I essentially had to start over, pay more while my ex kept the house, gained equity and did nothing.

I considered trying to keep the house but my divorce attorney talked me out of it. Biggest mistake of my life.

I have also paid moving costs, closing costs and furniture costs that are not in the figures above. it would have been cheaper or me to rent at 4k a month at this point.

Moving to the unknown can really cost you. Keep the house and do the ARM. Refi later or move before the term ends.

Do you really think the real estate market in 2023-2024 is going to see the stratospheric value increases seen in 2020-2022? If you do, you’re the only person in the US who does. OP is making the mirror image of your mistake. She’ll be paying the inflated 2022 price to her soon to be ex and watching her value drop, or at best, stagnate.

Of course not. But buying now is not ideal. She will pay more for less. Better to stay and sell years from now than buy another property.

She doesn’t have to buy immediately. Rent & wait until next year & see what happens to the market. Unless at least one of the partners is wealthy, trying to sustain two households vs. one requires compromises. Too many women compromise their future to try to avoid changing their current lifestyle. The real mistake pp made was not giving up her marital house, it was trying to replace it kind. Of course you should keep the house if you’re just going to go out and buy an equally expensive one. And as pp discovered, a “cheaper” house isn’t “cheaper” if the price is lower because it needs a ton of immediate work. Of all the options, that’s the dumbest. These women get divorced, but want to pretend that nothing’s really changed. It doesn’t work, and it’s an expensive delusion.

Well, *this* Op isn't "pretending nothing's really changed." Obviously I'll still be paying 1200 more per month which is not an insignificant amount and I have strategies for dealing with it, but yes it is all a risk. Sure selling and cashing out then renting is less of a risk, but it's also a possible missed opportunity to build wealth over the long haul which ALSO could screw over "these divorced women" - which I have also seen happen and would like to avoid.

So I think it's all about taking a calculated risk and reducing the potential for things to go completely awry right? But yes, divorce is a financial hit. I feel fortunate that at least I have a good stable job with amazing benefits.

I think this thread has probably run its course... thank you everyone who weighed in, including the naysayers. Maybe I'll report back in a couple years...

Good luck OP! Wishing you and your family health and happiness as you move forward.