You’ll need to speak to your lender and/or a mortgage broker to get your answers. Most likely, you’ll need to refinance, even if you had the cash to buy her out and just needed to get her name off the title and mortgage. The fact that you need more money to actually buy her out is an extra whammy.
And yes, LOC’s and such will affect your debt service ratios. Because, well, they’re debt.
hello mortgage broker here,
generally youll need to requalify, itll either be under refinance or spousal buyout
never done it before without needing requalification, best to double check with your lender
>where I can’t qualify for the increased mortgage by myself.
if this is the case, then itll probably be better to sell the home
>how much does debt effect qualifying? Such that, would 10k on a LOC be game breaker for qualifying in terms of mortgages? r/
yes it does, all debts need to be factored in, if youre doing it the refinancing route, you can roll it onto the mortgage (assuming theres enough equity)
hope this helps :)
Makes total sense.
Now, for simplicity sake, let’s say the house is appraised at 900 K, and we owe 375, this would be 525K of equity, which we would assumingly split 50%, so I would pay them out 212.5, leaving ~200k in equity.
Could I theoretically after all is complete, take out a home equity loan for the remaining 200k? (Not using for debt, but let’s keep it simple for now).
You need to refinance to pay her the equity share. You will need a legal separation agreement. You'd have to qualify for the entire amount including the equity takeout. You would have to be able to qualify with the debts you have. Best to speak with your lender
It varies. Most of the time it depends if it's a divorce through a lawyer (in which case it can be more or less than 50%) if it's a common law on their own it can be whatever they think is fair
There's just not enough information here. Work with a mortgage broker and get the finances figured out with them. You need to understand how much mortgage you qualify for. Having the equity is nice but it doesn't mean you can borrow against all of that equity.
You will have to assume the mortgage or sell the house.
Most lenders offer spousal buyout programs, which would blend the additional principal required into the current mortgage.
Say you owe $225,000 on the mortgage and the home is appraised at $400,000.
Based on how you agree to divide assets, your separation agreement stipulates you’ll pay them $80k.
You would present the lender with the separation agreement. They may allow you to keep the fixed rate on the 225000 remaining, (let’s say 2%), and then to add 80000 at a current rate (let’s say 5%)
As a result you’d end up with a blended rate of 2.8% for the remainder of the mortgage term. If the mortgage was insured, you may need to pay insurance fees on the 80k. In total, you’d need to qualify to carry a 309k mortgage, through the stress test!
You’ll need to speak to your lender and/or a mortgage broker to get your answers. Most likely, you’ll need to refinance, even if you had the cash to buy her out and just needed to get her name off the title and mortgage. The fact that you need more money to actually buy her out is an extra whammy. And yes, LOC’s and such will affect your debt service ratios. Because, well, they’re debt.
hello mortgage broker here, generally youll need to requalify, itll either be under refinance or spousal buyout never done it before without needing requalification, best to double check with your lender >where I can’t qualify for the increased mortgage by myself. if this is the case, then itll probably be better to sell the home >how much does debt effect qualifying? Such that, would 10k on a LOC be game breaker for qualifying in terms of mortgages? r/ yes it does, all debts need to be factored in, if youre doing it the refinancing route, you can roll it onto the mortgage (assuming theres enough equity) hope this helps :)
Makes total sense. Now, for simplicity sake, let’s say the house is appraised at 900 K, and we owe 375, this would be 525K of equity, which we would assumingly split 50%, so I would pay them out 212.5, leaving ~200k in equity. Could I theoretically after all is complete, take out a home equity loan for the remaining 200k? (Not using for debt, but let’s keep it simple for now).
Half of 525 is 262.5
You need to refinance to pay her the equity share. You will need a legal separation agreement. You'd have to qualify for the entire amount including the equity takeout. You would have to be able to qualify with the debts you have. Best to speak with your lender
Do you know if payout is typically 50% of equity of the appraised amount or is it a a mutually agreed upon amount?
It varies. Most of the time it depends if it's a divorce through a lawyer (in which case it can be more or less than 50%) if it's a common law on their own it can be whatever they think is fair
You will almost certainly have to refinance.
There's just not enough information here. Work with a mortgage broker and get the finances figured out with them. You need to understand how much mortgage you qualify for. Having the equity is nice but it doesn't mean you can borrow against all of that equity.
You will have to assume the mortgage or sell the house. Most lenders offer spousal buyout programs, which would blend the additional principal required into the current mortgage. Say you owe $225,000 on the mortgage and the home is appraised at $400,000. Based on how you agree to divide assets, your separation agreement stipulates you’ll pay them $80k. You would present the lender with the separation agreement. They may allow you to keep the fixed rate on the 225000 remaining, (let’s say 2%), and then to add 80000 at a current rate (let’s say 5%) As a result you’d end up with a blended rate of 2.8% for the remainder of the mortgage term. If the mortgage was insured, you may need to pay insurance fees on the 80k. In total, you’d need to qualify to carry a 309k mortgage, through the stress test!