The equity in the home needs to be determined by an appraiser…call
me if you need a recommendation and referral. The appraised value
less the eventual costs of selling (commissions and seller closing
costs) equals the equity to be split between the two parties. In
general, any money you or your spouse contributed to the home from
your own pre-marital assets must also be accounted for in
determining the final division of equity.
With the divorce, your spouse may put a marital lien on the property
or there may be a court ordered mandate for distribution of the
equity, possibly including interest on that amount. This means that
you will likely have a specified amount of time to obtain funds
needed to give the ex-spouse their portion of the equity. This can
be done by cashing out the equity in the home with a new mortgage,
selling the home or by using other assets you have to “buy out”
their stake in the home.
If you chose to stay in the home, you have two financing options to
pay your ex-spouse. You can either refinance your home to get cash
out, or you can obtain a new second mortgage or home equity loan.
Even though you may now be qualifying for the loan without a
spouse’s income, with your own good credit and income, you may or
may not qualify on your own for the new loan due to the new
increased loan amount and/or interest rate. Often, child support and
alimony is viewed as stable income provided is likely to continue
for at least three years. It is pertinent during this trying time
that you consult with a trusted mortgage professional. If you or
someone you know is struggling with a divorce and its issues, do not
hesitate to contact me at 619-997-8744.
Jeri Winberg
Home Loan Consultant
Cell 619 997 8744
Efax 619 374 2974
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