aaj
recently joined
Reged: 06/09/06
Posts: 6
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Our house is appraised at $750,000. We have $88,000 left on the mortgage. We've agreed I'd buy him out. So I owe him $331,000. If we pay off the mortgage and I refinance $375,000 I'll pay ~$15M in points and closing. If I assume the $88M mortgage, can I get a second mortgage to pay him off with? And by keeping the first mortgage do I avoid all the closing costs except the points on the new loan?
aaj
"Finance is the art of passing money from hand to hand until it finally disappears." (Robert W. Sarnoff)
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Cinder2
Carpal \'Tunnel
Reged: 06/02/05
Posts: 4361
Loc: Southern California
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Dear AAJ,
I would look around on a couple of websites, like lendingtree.com and put some numbers in their calculators. Somehow I don't think they're going to consider $375,000 as a "second" mortgage.
I would definitely shop around for a deal with no points or fees. That way it doesn't matter how you do it.
Cinder
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matilda
Pooh-Bah
Reged: 11/11/04
Posts: 2087
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Sometimes there are different rates for a first than a second. If you have a first you can deduct the costs of a loan from your taxes, while with a second you can't deduct costs, only the interest. Also if you don't pay off the first, his name will stay on the loan. As a condition for divorce, he may ask for you to re-finance. The reason is if you default or are late with the payment it will affect his credit. It MAY also limit him when he applies for credit.
Shop carefully. Do your research because many lenders like to add in junk fees. You can try to negotiate to get rid of these. For example, they might try to charge you $300+ for an appraisal. Most likely they will use a computer generated appraisal with a much lower cost. The higher amount is if a person comes out to physically inspect the property. Junk fees MAY include processing fees, document fees, etc.
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Spring
Carpal \'Tunnel
Reged: 06/02/04
Posts: 7972
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I would combine the two debts and get one first mortgage at decent rates. In my neck of the woods, you should have no problem qualifying(if your credit is good) for an equity mortgage. Call a mortgage broker for advice.
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Never consider the possibility of failure; as long as you persist, you will be successful.
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LinusluvsSally
addict
Reged: 08/23/06
Posts: 441
Loc: South Florida
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I am in the process of buying out my ex's share of our home and we've been divorced for 6 years. You can take out a home equity loan with very low up front fees but the rates are typically higher than if you were to refinance your existing first mortgage with a new conventional first mortgage. I'm refinancing $141K of outstanding mtge debt plus $100K cash out with a new 30 year conventional fixed rate mortgage at 6.75% and I'm only paying the mtge company $350. It's the state and county taxes that get ya plus new title insurance. So my total cost at closing is like $4,000. And if you plan to use the house as your primary residence you should get an even better rate.
In exchange for money my ex will sign a quit claim deed and move out. It's about time, too, if I may say.
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