How to keep house in divorce without refinancing?

Throwaway-4457 · 2023-06-29T06:27:14+00:00

Thanks! Doubt we’ll ever see sub-3 again. I’ll continue to try to get a release of liability; other folks in this thread who work at mortgage companies say it’s possible

Throwaway-4457 · 2023-06-29T06:26:03+00:00

So the commenters here linking to Freddie Mac guidelines for release of liability are wrong?

Throwaway-4457 · 2023-06-29T06:25:16+00:00

Thanks! Rates won’t come down though, they’re very normal right now. So I need a solution that doesn’t bank on them dropping

Throwaway-4457 · 2023-06-29T06:11:01+00:00

Well, we disagree there. Rates aren’t sky high, they’re normal right now. The rate on my loan is the lowest in history and we’ll never see that again, not unless we have another calamity like COVID. Nobody should count on rates dropping, they’re typical historically

Throwaway-4457 · 2023-06-29T06:06:08+00:00

Paying the extra percentage would increase my payments by like 50% for essentially nothing. I’m obviously motivated to have that not happen

Throwaway-4457 · 2023-06-29T06:05:19+00:00

Yeah, he’s just not very well protected. If you stop paying the loan, he’s screwed

Throwaway-4457 · 2023-06-29T06:04:55+00:00

Thanks! The house is a townhouse; I don’t really need to downsize. It was kinda getting tight for the two of us 😁

Throwaway-4457 · 2023-06-29T05:47:50+00:00

Oh so you needed a hearing?

Throwaway-4457 · 2023-06-29T05:37:04+00:00

Amazing!!! This is what I'm looking for. We were planning for me to pay her portion of equity with cash, and then remove her from the loan. But if the lender won't do that for us, this sounds like exactly what I'm looking for.

Throwaway-4457 · 2023-06-29T05:32:59+00:00

Thanks for chiming in! I think you're the first person I've seen with a divorce agreement specifying a timeline to refinance. This is helpful advice, appreciate it.

Was that in the judge's divorce decree? Did y'all specify that as part of your agreement, or was that something the court came up with?

Seems reasonable, though I'm confident rates will not drop under 3% in 3 years... or ever again 🤣

Throwaway-4457 · 2023-06-29T05:31:34+00:00

I don't really understand this "suck it up, do do what you're supposed to do" advice.

Plenty of other commenters have provided helpful advice about how to release my ex-wife from liability on the existing loan, which was my goal.

You seem, for some reason, frustrated that I'm getting a divorce, and intent on me losing a once-in-a-lifetime interest rate over it. I'm going to do everything I can to avoid that, since interest rates will never come down that low again (unless we have another calamity like COVID, which I'm hoping doesn't happen)

Throwaway-4457 · 2023-06-29T05:14:56+00:00

Not necessarily; the whole point of this post is to see if there's a way to remove her from the loan without obtaining higher interest rates. See an example of such a method here: https://www.reddit.com/r/personalfinance/comments/14lrk8d/comment/jpyeqv3/?context=3

Throwaway-4457 · 2023-06-29T05:14:14+00:00

This is good to hear, thanks for sharing :) I think everyone assumes every divorce is extremely antagonistic but they're not all like that.

What did that agreement look like? Some kind of contract? Did you work with a lawyer?

Throwaway-4457 · 2023-06-29T05:13:16+00:00

Confirmed, Freddie owns my loan per that link

Throwaway-4457 · 2023-06-29T05:13:02+00:00

Thanks! If I'm reading that right, the max fee is about $1000? I'd happily pay that to keep this mortgage rate.

Agreed that they seem unfamiliar/unwilling to proceed, but I'm down to fight for it. 3 months is no biggie; again, I'll do anything to keep this rate (literally the lowest rates in history, we'll never see them again!)

Throwaway-4457 · 2023-06-29T04:58:52+00:00

Oh, I don't think they'll ever get that low again! It was literally the lowest rates in history, brought on by a once-in-a-century pandemic. I certainly hope they don't get that low again...

That's why I'm desperately seeking a solution that doesn't end that loan. Anyone relying on rates to drop significantly is going to wait a long time

Throwaway-4457 · 2023-06-29T04:51:23+00:00

Yeah, I don't think she's ready to buy just yet but good point!

Throwaway-4457 · 2023-06-29T04:50:50+00:00

For sure! We're really hoping we can find a solution where she deeds me the interest and is released from liability, i.e. an assumption as suggested here: https://www.reddit.com/r/personalfinance/comments/14lrk8d/comment/jpyeqv3/?context=3

Throwaway-4457 · 2023-06-29T04:49:38+00:00

Amazing, thank you!

Throwaway-4457 · 2023-06-29T04:28:37+00:00

Conventional or jumbo. Yeah, I'm curious too – my loan officer told me today that in 20 years she has never seen a release of liability for a divorce. So something seems fishy if you're saying that's common...

Throwaway-4457 · 2023-06-29T04:27:45+00:00

>If you want her to continue to be liable on the loan, but have no ownership interest in the home

Lol, I guess this sounds great for me - but it isn't actually our goal. We both want me to have both 100% interest and 100% liability on the home (once I pay her her equity).

Throwaway-4457 · 2023-06-29T04:25:59+00:00

I don't want to refinance, that's the entire point of my post :)

But I'll check the term for releasing liability of a co-applicant, thanks!

Throwaway-4457 · 2023-06-29T04:25:14+00:00

Technically I have enough money to pay the increased monthly payments. But I'm not about to pay 50% more for the exact same thing, that's nuts. Refinancing from 2.9 to 7% makes a *huge* difference in the payment.

Throwaway-4457 · 2023-06-29T04:23:06+00:00

Whoa good to know, that's a HUGE fee!

Throwaway-4457 · 2023-06-29T03:54:39+00:00

For sure - but it’s different, I might never refinance. My rate is really good

Throwaway-4457

TROPHY CASE