It's in the D papers, which should be final any day, that I am go get the house.

I have been told that I have to re-finance it in order to have it put in my name.

That's the part I don't understand - why would that be necessary?

And if the house was re-financed just a few years - it was, by STBXWH - will that cause a problem?

And since he makes way more than me and I am getting spousal support, are they just going to laugh when I walk into a bank wanting to do this?

Thanks for any advice - should this also go to GQII?
thanks
Mulan

Here's the skinny:

You are going to be the soul owner of the home. It was purchased jointly using both your names and credits originally. Therefore you got the interest rate, terms, etc based on both your credit records/incomes. So now that it's going to be owned entirely by you, you need to refi so you can get the loan, etc in your name only based on your credit rating and income.

It's a fairness thing, if your credit rating sucks and your H's was great, you got the deal you got because of his great credit rating. So if the house goes in your name, the bank will give you a new loan that is commiserate with your credit alone. If you had bad credit and your H had great, your rate won't be as good as the original loan. If you had the great credit and his was bad though, you should get better terms, theoretically.

IRT income, the bank doesn't really care all that much where the income comes from. As long as your income is steady and meets their requirements for the amount you plan on buying, you'll be fine.

Last piece of info/advice regarding home purchases, if you can't afford/qualify for a 30 fixed rate mortgage, you can't afford the house. The sole purpose of any other type of loan (ARM, balloon, interest only, reverse ammorization) is to defer money that you should be paying. If people stuck to the above advice, there would be no housing market crisis right now.

Hope that helps!

T

Ditto what tc said above. If the home is yours, then any debt on that home should be only yours as well.

Did your STBXH get any equity from the home. If so, you may need to actually hand over cash to him as well, so the mortgage may need to be for MORE than the current mortgage to buy him out of any equity he has in the home. Of course that will be spelled out in the divorce agreement.

I kept the home in my divorce, but had to pay my XW for equity in the home. She valued the home 20% too low and after asking twice, I didn't ask again and agreed to that very low home value.

He took equity out of the house about 3-4 years ago when he did the re-fi. He gave me half. I still have it in my savings account.

Thanks guys - good luck to us all.
Mulan

It's just that I am terrified that when I walk into the bank, or wherever, to get the re-fi they are going to say,

You want *what*? (A re-fi on a 1750-square foot suburban home, about 15 years old)

And you're how old? (56)

And you make how much money? (about 25k/year doing medical transcription, plus about $2,400/month in court-ordered spousal support but only for the next 6 years)

And they will simply fall down on the floor laughing themselves into unconsciousness.
Mulan

If you don't mind sharing, how much do you need to borrow? I don't know much of AZ real estate but 53k a year in income can finance a fairly sizable loan depending on credit worthiness.

Your income is relatively fixed... so it's going to depend on how much you need to borrow and your credit score. Rest assured that the bank/credit union folks aren't going to laugh at you BUT if you do refi this house make sure you have a plan to be able to afford it when your spousal support runs out in six years. Don't let that date creep up without some sort of action plan.

T

Mulan, have you talk to a financial planner about this? I think it would be worth the money to get some serious, unbiased advice regarding your financial situation. You don't want to end up house-poor as you're heading into years where the risk of not being employed due to illness or disability go up. I know AZ real estate has been hit hard, and if your husband refinanced and took equity out of the house, you are probably upside down which can be scary. That's where a certified financial planner can help. Also, go to a locally owned and operated bank that does manual underwriting. They'll look at more than just your FICO score.

((Mulan))

I went through the same thing. My D papers said I had two years to refi in my name only, but exH really wanted it done sooner for some reason. I did have some trouble proving the income, the CS and alimony, plus my part time job and my day care money. It was a lot of red tape and paperwork shuffling to prove I could pay for it.

I just stayed with the same bank I had the original mortgage with, I thought that would make it easier since I had history with them, I don't know if it helped.

My advice would be just don't get frustrated. Just keep sending whatever paperwork they want. I had to wait until the divorce was final and stamped and send copies of exH deposits to show that he had a history of paying.

Just keep your eye on the prize, that payment book wih just your name on it. I could see it in my head and I was so excited the day I received it in the mail!

Thanks again, guys. We bought the house for 134,500 in 1998. I think it's estimated at about 150,000 now (it's in excellent shape and has had all new tile floors and wall to wall carpet added, along with two new tile showers). It has a huge landscaped yard and is in a very good neighborhood.

Guess we'll see . . . it was bad enough losing my husband, but I cannot bear the thought of losing my home too - my DS21, a full-time student, and one of his (male) friends also live here - it's not just me here on the Island of Misfit Toys -
Mulan

Another option provided by some banks allow you to "assume" the mortgage currently on the house. I have Citimortgage and they sent me a packet outlining the process. The fee was $700 and you must provide them with your "Dissolution of Marriage" for it to occur. These was good in my situation because it allows me to keep the 5.375% interest rate I have which I probably would not be able to get now. I have not completed the process yet because I currently separated and not official divorced.

Your lender will insist that the loan be in the same name(s) as the title to the property. You can't change one without the other.

I second the idea to start with a local bank or credit union. They tend to be smaller, you'll get more personalized service, and their most knowledgeable people will be local. Interview as many loan officers as it takes to find one you're comfortable with.

You might consider getting two loans: a fixed-rate mortgage scaled to the payment level you can afford on your wages; and a second mortgage with a shorter term, that you can cover with your spousal support. Second mortgages often have variable rates. Right now, that rate will be lower than your first mortgage, but there's no telling where rates will go from here.

Guys, thanks again for the info. D&C34, I also have Citimortgage and the D is not yet final (should be signed off any day). Looks like we're in the same boat. "Assuming" the current mortgage sounds like it would work well for me - that would be something of a relief.
thanks again -
Janeen

Mulan:

DOES your Divorce Decree STIPULATE that you have to refi the house out of your STBXWH's name?

If not, don't worry about it. Hopefully, your attorney also got STBxWH to sign a quit claim deed on the property.

It works like this: The bank wants to have as many people obligated on the loan as possible. But the only name you want on the title is YOURS. Meaning that you can sell it at anytime and your X has nothing to say about it. And you can have this disparity, where the loan is obligating several people, (Mulan and X) but the title is in your name.

Now, if you have to refi, because your Divorce Decree requires it, then you will be the liable party, and sole owner. Got it?
The only way to remove the X from the debt is to refi, or loan modification as D&C34 mentioned. And that is all that X wants, is the name off the debt.

How much debt is there? And don't worry about getting laughed out of the bank. They want to sell you the money. DO NOT be afraid to shop around. DO NOT jump at the first one to say YES.
CIti may or may not work with you. The current market for mortgage is based on Fannie and Freddie, and pretty much all the fees and charges are the same. So look around. A refi won't happen before the Divorce is final anyway, and don't worry about a half point move in the interest rate, in the long run it seems like alot of money, but a extra $500 in prinicpal paid each year will negate that.

Get your ducks in a row, ask for a Good Faith Estimate of closing costs that is signed from each potential lender, (if they won't sign, then DON'T use them) and compare costs. A local bank or Savings & Loan may be easier to work with, especially if they keep the loan in house. Fannie and Freddie have just instituted 2-4% charges of the total loan for "insurance" purposes to try and bail themselves out. The lenders will ask for ALOT of info. Give it to them. Make copies of everything, because each lender will want copies.


LG

Mulan - I did this myself last year. A couple of points that others have mentioned, but bear repeating....

-The D must be final and you have to have paperwork in hand before going to close. You can start the refi process now if you like, but you cannot close until the D has been signed and finalized. A contract (negotiated divorce in this case) is "final" when both parties sign. You don't have to wait until it goes on file with the county (which can take several more months)

-You must refinance because that's simply how you get the house in your name. You XH can't just sign over the deed because you guys don't have it. You "getting the house" in this case simply means you "getting to -buy- the house". Whether or not you can afford to keep it is irrelevant as far as the courts and the banks are concerned.

-You don't have to use the same bank. Some are better than others. Take a look at James B. Nutter. I have been using them for years. They offer a no-cost refi and their rates are very competitive. They also maintain their own loans, and don't sell them off to other institutions like other major lenders and mortgage companies. This is what has allowed them to weather this financial crisis.

That's the good news btw... Interest rates are at historical lows and you'll likely get a great rate. I refi'd last year when my D was final, and I'm looking to do it again right now. I'm just waiting on my paperwork. It will save me another $80/mo.

Something else, if you were paying PMI, you might be able to get out from underneath it with the refi assuming the current value of the home is worth at least 20% -more- than the principle. That can knock off another $100/mo.

When my husband and I separated, he got my name taken off the loan without having to refinance. As long as your income meets the loan requirements, the bank won't require you to refinance. He did have to pay a fee (I think it was $300). At least that was our experience in 2007.

Sorry I missed this when it first came up. I had to refinance my house to get WstbxH off of it. It was scary, but it turned out to be no big deal at all and I ended up with a lower monthly payment (interest rates are low right now). I did not have to be divorced but this could be a Canadian thing (we never seem to get divorced up here unless someone is remarrying). I did have to show them the signed LSA.

It actually felt really good when it became *MY* house. I fixed it up and sold it last year for a lot more than we had settled on as its value. I did a lot of growing up that year I was the sole owner of *MY* house.