My (soon-to-be) ex-wife and I jointly own a house without a mortgage (paid-off, 50% equity each). I would like to buy her out when the divorce ends / is finalized at the end of September (this month) for the sake of stability for the 3 kids (and as the alternative of buying/renting anew elsewhere not appealing for the next few years). Great credit personally (no other debt), low personal expenses and assets/earning capacity post-divorce big enough to cover paying off the money in ~5-10 years under normal circs. even with child support of ~2800 a month.
However, I have lost my job (notified 9/4, effective last date 11/6 with regular pay in interim) making this plan more risky. Had a prenup in place so only community asset of size is the house and unable to trade ex a higher share of some other community asset in exchange to lower risk of loan size/payment without raiding retirement funds, tax-susceptible investments, etc. A few questions for input from the wise men/women of Bogleheads:
1. HELOC vs. cash-out refinance: Assuming HELOC is best option as no close-out costs, interest rates likely to decline and (assuming get a new job), able to repay or get a new fixed rate mortgage later ? Please let me know if think differently.
2. Any watch-outs / cautions in my situation? Other than minimize raiding retirement funds as per above which a HELOC should hopefully prevent.
3. Any alternatives am not thinking of? I tried exploring a regular mortgage but tricky with job loss. And no, buying elsewhere or renting is not super viable either for me seemingly (e.g., have kid custody for substantial portions and so downsizing is not very practical till the eldest is out of the home, transaction costs stiff in my area as well as moving costs, etc.)
However, I have lost my job (notified 9/4, effective last date 11/6 with regular pay in interim) making this plan more risky. Had a prenup in place so only community asset of size is the house and unable to trade ex a higher share of some other community asset in exchange to lower risk of loan size/payment without raiding retirement funds, tax-susceptible investments, etc. A few questions for input from the wise men/women of Bogleheads:
1. HELOC vs. cash-out refinance: Assuming HELOC is best option as no close-out costs, interest rates likely to decline and (assuming get a new job), able to repay or get a new fixed rate mortgage later ? Please let me know if think differently.
2. Any watch-outs / cautions in my situation? Other than minimize raiding retirement funds as per above which a HELOC should hopefully prevent.
3. Any alternatives am not thinking of? I tried exploring a regular mortgage but tricky with job loss. And no, buying elsewhere or renting is not super viable either for me seemingly (e.g., have kid custody for substantial portions and so downsizing is not very practical till the eldest is out of the home, transaction costs stiff in my area as well as moving costs, etc.)
Statistics: Posted by camillus24 — Sat Sep 07, 2024 12:53 am — Replies 0 — Views 135
