Kids live with me. I want the house

[longwalkahead]

I'd like to buy her out of her half of the house (we're in CA) but probably won't be able to get together enough $$$ to pay it all up front. Is it possible to pay out the "equalization payment" (if I've got that right) over a long period of time?? Will it make any difference that she left and the 2 kids still live with me there?? Anyone been in a similar situation??

[defaultuser]

The kids and house usually go together. Even if you are ordered or agree to paying a lump sum so what?

You dont pay but pay what you can. You can't be found in contempt if you don't have the ability to comply.

Often you work out something where you pay her off over a period of years...

[Txbizman]

Yes you can buy her out over time. Work out the terms (don't agree to interest if u can avoid it) and draw up a contract between the 2 of you and enter it with the final decree.

[hoosier_dad]

How much equity do you have in the home? Many lenders will allow a cash-out refinance if you have more than 20% equity in the home freeing up some cash to buy her out.

[Trevor]

Many lenders will allow a cash-out refinance if you have more than 20% equity in the home freeing up some cash to buy her out.

Many? Really? I hear you, but...

Be prepared not only to walk on water, but to prove that your mother was a virgin too. If you stick a piece of coal in a lender's rectal orifice they'll poop out a diamond in a week.

[longwalkahead]

We actually have between 300 and 350K in equity even in this market and we owe about 300K. So is that 100% equity? My parents gave us 35K as a down payment 18 years ago. There was a verbal agreement to pay them back if we ever sold, but no paper contract on that. I do hate to consider divorce only because of this but the lower market value of the home and the low interest rates make this the ideal time to make a move like this. And probably the only time I could pull it off.

She's stated that she wants our boys to stay in their home. The youngest will graduate from high school 5 years from now. She only lives in a 1 bedroom apt which I pay for (1k/mo) This leaves me with primary physical custody (No paperwork filed yet). I've also been paying the entire house note (2k/mo) myself for nearly a year.

I guess I'm asking if there are advantages to my position because she took off (to live the party life) or if it's all still 50/50 and I need to come up w/ the entire half of her share of the equity? Does the time of separation start when she moved out? Does the $$ I've paid since she moved out count in my column? I know every month I pay about $500 on the principal so I suppose I'm just giving her that much more as each month passes.

I'm not trying to screw her out of anything, honestly, but I just don't know how the courts will approach this. Please advise.

[hoosier_dad]

Point taken Trevor, but with enough equity it is an option especially in this case. My credit was completely hosed due to legal fees but I was able to execute a cash-out refinance and buy my ex out. You have to jump through more hoops and you won't get the best interest rate, but in my case it was my only option.

OP, here's some more info if you are interested: http://www.loan.com/home-loans/cash-out-refinance-qualifications-and-requirements.html

[longwalkahead]

The refinance process must start after divorce has taken place. Is that so? And I'm imagining that my credit (which is very good) will take a hit. I may ask my parents to co-sign, but it still leaves me with quite a big monthly payment... especially if I'm still paying her support. I just don't know the order in which these things happen and even if I can manage it. We'd both rather leave the lawyers out of it as much as possible but to arrange this kind of buy out I'm certain I'll need one.

[kidsdadtexas]

It only requires a 620 (this is an awful score) credit score to cahout refinance with the right bank or mortgage broker. Yes you can start the process now however she will have to deed the property to you at closing. She is NOT to be included as a borrower on the new loan when you refinance.

You may have problems if your debt to income ratio exceeds the 45% threshold. The ratio is calculated by totalling all month obligations listed on your credit report, plus proposed new house payment including taxes and insurance, plus any court ordered support divide that number by the gross monthly income. If the 1k monthly that you are paying for her apt is court ordered then it will count as your monthly debt. If not don't tell your bank you're paying for her apt.

Hopefully the appraisal is less than what you think its worth because them you could reduce the amount of buyout.Most banks have there own internal overlays to conventional loan guidelines which is published by fannie Mae, therefore you may first want to confirm the minimum score to qualify. Because CA is a community property state they may require her to be on title to the property at closing so the deed to you may have to take place after closing. In exchange she revives her buyout which can be held in escrow until she deeds her ownership interest to you.
There is usually a "due on sale" clause in the note with the bank and this means that if any owner of the property sells their interest in the property then the bank can call the note or demand full payment. Because of this you may want to wait until your divorce is final to remove her from title. However most banks will not exercise this clause because they don't want your property they want the interest earned on your loan.
http://WWW.brokeroutpost.com is a good place to find a lender if you're credit has blemishises.

[Txbizman]

You need to enter into a mediated settlement agreement (MSA) and the 2 of you can settle your divorce pretty much how y'all see fit. I just finished mine in which I bough my ex out of 4 pieces of real estate and a multi miliion dollar business with 15k down, 10 year note no interest. It's all about how good you can negotiate with her. I used what i call the " Trump Dump" method. Basically how Donald Trump handled one of his divorces was "look we are about to go bankrupt, you either need to take this offer or face the fact that we may have to dump it all and then get nothing". Now mine was a little thick headed so it took almost 2 years to get it done.....

Personally I wouldn't be to concerned with screwing her.... She kicked you and the kids to the curb so she could live out the party life. Get it done ASAP before she wakes up and realizes what she's about to lose.