Question about home buying

FanOfFanboys

So this is pretty off topic, and I think I may know the answer but going to hope I am wrong. 

The wife and I are divorcing. We bought a house about 4 years ago. She does not want the house but I would like it. The loan is in her name so I would need to buy the house from her, I assume. Credit for both of us in not an issue but cash would be with everything else going on. The house has approximately $15K in equity. The title to the house is in both our names. 

So my question is can I buy the house for the difference in value and amount owed and use the equity as down payment? Essentially she would get $7,500 from selling house to me and I would use the $7,500 in equity as downpayment. I know there will probably be fees and such so it might not be exactly $7,500 but I am just rounding here. 

Any other ideas or suggesstions would be great if any real estate guys on here. 

Little Steven

FanOfFanboys said:

So this is pretty off topic, and I think I may know the answer but going to hope I am wrong. 

The wife and I are divorcing. We bought a house about 4 years ago. She does not want the house but I would like it. The loan is in her name so I would need to buy the house from her, I assume. Credit for both of us in not an issue but cash would be with everything else going on. The house has approximately $15K in equity. The title to the house is in both our names. 

So my question is can I buy the house for the difference in value and amount owed and use the equity as down payment? Essentially she would get $7,500 from selling house to me and I would use the $7,500 in equity as downpayment. I know there will probably be fees and such so it might not be exactly $7,500 but I am just rounding here. 

Any other ideas or suggesstions would be great if any real estate guys on here. 

Do not under-estimate your lack of cash before the divorce is final. Sorry

FanOfFanboys

Have good income and some cash, but not enough for each of us to put down a downpayment on different houses. And we both have zero debt outside of vehicle and mortgage. No credit card debt or anything at all. Worst case we sell this house and split the equity. Just would like to keep this house is all. 

HDumptyEsq

Can you talk to the mortgage company at this point? They may just like to 'keep you in bed' and have some suggestions…..

hondabbq

Just would like to keep this house is all. 

 

Use that to your advantage. Make that a feature of you keeping it that there will be no realtor fees to lose out on, plus the waiting and investment (possibly) to make it market ready.

Little Steven

hondabbq said:

Just would like to keep this house is all. 

 

Use that to your advantage. Make that a feature of you keeping it that there will be no realtor fees to lose out on, plus the waiting and investment (possibly) to make it market ready.

There shouldn't be any realty cause his name is on the deed already. If she will take hers off for 1/2 the equity it's a good deal. Way better than selling, paying the legals and realty, and then doing it on a new place again.

danv23

If you have EAP through your employer you likely have a free 30 minute consultation - ask for a real estate attorney.  Sorry to use that word (attorney) but most know what they're doing.  Good luck.

hondabbq

Little Steven said:

hondabbq said:

Just would like to keep this house is all. 

 

Use that to your advantage. Make that a feature of you keeping it that there will be no realtor fees to lose out on, plus the waiting and investment (possibly) to make it market ready.

There shouldn't be any realty cause his name is on the deed already. If she will take hers off for 1/2 the equity it's a good deal. Way better than selling, paying the legals and realty, and then doing it on a new place again.

My comment was in reference to him saying that its possible to sell the house and split the profits/losses.

FanOfFanboys

And I want to mention again bc I think it is the biggest potential hurdle: my name is not on loan, just the title. If my name was on both then could request the bank to just drop her and I would pay her out of pocket the difference. 

I would be required to take out a loan though which I think requires a sale, correct?

Another thing we talked about is me renting the house from her if my original idea is not an option. I would sign a lease, pay rent in the amount of the mortgage, while I saved up the money needed for downpayment. This would mean a couple things. She would need to find a place to rent during this time period, house stays with one of us (we want this for kid), she does not rush into buying a house. I don't know if this would be viewed as income for her though since the rent amount would equal mortgage. 

grege345

I think it all boils down to how amicable how things go between you to

RaleighGuy

Not to be harsh, but get an attorney. She probably already has one, or will in the very near future.

stlcharcoal

Like others have said, get with the attorney that's handling this for you.  I'm a Realtor (occasionally), but we don't get into these kinds of deals since there is no sale involved.  We can help determine the market value and paperwork, but when it comes to making both sides happy, that's not going to happen.  This kind of stuff happens all the time, the attorney's will have the most amicable way of handling it.  Getting the deed switched over is no big deal (quit claim it), but the loan might be an issue if you need both incomes to qualify.  Good luck.

RRP

She may be friendly now but her attorney will try to nail your butt to the wall! I've seen it happen too many times!

Cowdogs

Wow...  Such a simple question ... with such complicated answers.  

• Your wife will want, and is entitled to 50% of the equity in the home.
• You can buy the house if you are borrowing <= 80% of the appraised value. 
  
• So if after giving your wife her 50% of the equity, do you have 20% of the appraised value for a down payment?  Good credit?  A good debt to income ratio?  Congrats, it will be your home.

There are some reasonable people can take their property and divide in half without needing help from 2 attorneys.  And there are those that can't.  You probably know which camp you fall into.

MaskedMarvel

If amicable, REFI the hell out of that thing first - rates right now are stupendous, and that'll be harder to get after a divorce hit on your CR...

Sorry for what you're going through.  Best of luck.

EggSpinner

Talking to an attorney is always a good idea but I agree with MM.  If you have the ability to pay her the difference in equity out of pocket, why not refinance?  I don't see all of the figures but it does not sound like you have enough equity in the home for a cash out refinance.  You have been on title for 12+ months so you should be able to do a rate and term refinance in your name and have her taken off of the mortgage and title (provided you qualify by your self).  If your loan is a with a local bank, go and talk to the loan officer.  If it is with a larger mortgage lender just call them.  Both will be happy to refinance you.  Just to reiterate those comments above.  Talk to an attorney and not just a real estate attorney, a divorce/family law attorney.  Everything may seem amicable now....

Good luck.

Firemanyz

As you stated above your biggest hurdle is the fact that you are not on the loan. You will have to refinance to get the loan out of her name and into yours. If you go the route of renting from her MAKE SURE that there is something in the divorce agreement that spells out the terms. Would hate for you to be paying her rent and that money was used for something else except paying the mortgage. When it came time to forclose you would be short and she would have your "rent money" for the last year or two. As stated above many times go/talk to your attorney that is handling the divorce. Also a real estate attorney would be in your best interest, to figure out what your best move is. GOOD LUCK and not to pry but let us know how it turns out.

fishlessman

i think i would just try and sit down with her and her mortgage company and see if the loan can simply be just rewritten in your name with new terms. my last loan refinance was insanely simple, i refinanced with the same bank to a lower rate and they literally charged nothing to have it rewritten, no title fees, no appraisal, no credit check, and done in less than three weeks with the closing done in my office. i was blown away with how simple it was compared to loans in the past. i would beg steal and borrow that 7500 dollar buyout before i had to put it down on a lawyer thats going to size you up for 20k each

Foghorn

Actually refinancing while you are still married could be brilliant. You could get a lower interest rate and put your name on the loan at the same time. 

HDumptyEsq

Foghorn said:

Actually refinancing while you are still married could be brilliant. You could get a lower interest rate and put your name on the loan at the same time. 

"Compromise is the best lawyer" - Robert Louis Stevenson

stlcharcoal

Just FYI, if the divorce paperwork is already in process, that MUST be disclosed for the loan and for any real estate transaction.  If you are just "thinking about it", that's nothing definite and would not need to be disclosed.

Cowdogs

HDumptyEsq said:

Foghorn said:

Actually refinancing while you are still married could be brilliant. You could get a lower interest rate and put your name on the loan at the same time. 

"Compromise is the best lawyer" - Robert Louis Stevenson

Since she would not be on the mortgage or the deed, I'm not sure why the rate would be any better with them married. 

Foghorn

? apparently my comments now have to be approved - so if my posts seem out of order or context, that would be why - ?

Foghorn

"Since she would not be on the mortgage or the deed, I'm not sure why the rate would be any better with them married."

I didn't mean to imply that the rate would be better because they are married - simply that the rate would be better because rates are currently very low.  And that a re-fi now with the addition of his name to the mortgage would make it easier for him to assume the mortgage at the time of the divorce (I think).

henapple

I wouldn't lease from her. Attitudes change and with you renting from her ultimately she has the upper hand.

@Foghorn‌. ..ha

grege345

I agree with @henapple all is fine till you start cookin for the new girl

FanOfFanboys

Thanks everyone. Def some good advice and something to think about.