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Divorcing, gunna have to figure out if to sell or what

Bought our house in the San Jose area in Jan 2005 just before the last spike and got it under market value w/o realtor. Was finally able to afford something so that is why it timed as it did.

We have a 5/1 Interest only which shifts in 1 year and an adjustable 2nd. Luckily we bought when we did and not 3 months later or else would already be under water.

I was concerned about refi next year with prices falling, but rates are still higher then they were at the time. Now looks like heading for divorce and with realtor fees and dropping prices look to be crossing into the red now.

I can afford the payment by myself no problem. I have upper 5 figures in "Savings" and high credit (upper 700's).

I am not sure if could even refi now (without injecting cash, i doubt it) for either/or getting wife off the loan or to avoid hitting adjustable. I am less concerned about the details of splitting things up at this point and more thinking about the investment in general for us together or separately.

In general i want to own, aka if i sold i would be looking to buy something again asap and always wanted to invest further down the line in a couple years.

Thoughts on how to proceed? Definately not in love with the current property.
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January 27 2009 - West San Jose
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Answers (8)

Sorry for the distress to your situation.  Personally, I would make it part of the divorce. I would not be buying anyone out. Real Estate is fickle at the moment and you don't want to be tied down with unhappy memories when what you really want to do is start over fresh with your life.  The real question is do you want a joint investment with your ex spouse? and what if the ex- spouse feels its their turn to move in- with the new spouse and 6 year old. Since we are down to 2005 prices in most neighborhoods; I would have to know where you house is to determine that correctly; its like you haven't even lived there at all!

I say sell, make it part of the whole divorce package. Anything negative can be explained away to a new lender in two years time and its easier to explain it all as part of the divorce rather than a true short sale and you wanting to get out from under the investment.  Also, where do you want to live? Focusing on that is far more fun for your life, than focussing on a joint investment with an ex.  And what conversations will you have  with your new life friends, "I still own my house as a joint investment with my ex". Just not liberating enough - still sounds like albatross material to me.  Just be thankful you are not at 2001 prices as some are... Need more information but for the most part - new life, no attachments - sounds like the better, healthier way to go.
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November 29 2010
Check with your current lender about converting your current loan. You probably remember the mailers they used to send telling you for $500 and filling out the form you could lock in a better rate? Just ask; some of them are willing to do it to avoid another non-performing asset on the books. If it's underwater, depending on the lender, that is enough reason to justify a loan modification.

Consider marital counseling even if you don't think it will work-you'll both probably learn a lot and it can make this already painful transition a bit easier.
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October 20 2010
California allows one party to quit claim the property to the other party, unfortunately that's not going to take her off the loan.

Do you know what the value of your property is, depending on where you loan to value falls there are products out there for financing more than 80%.

If you'd like to research the possibility of a refinance & your options feel free to contact via my Zillow profile.
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September 15 2010
Have you talked to a couple different mortgage brokers to get their thoughts on the refi? I think that would be the best first plan of attack, to see if you can avoid going adjustable when that hits. If you need any referrals to good mortgage brokers, let me know.
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September 15 2010
Dont know if your state does it but you can quit claim her off real easy. well it is where i'm at.
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March 17 2009
Good questions.
Several couples are either hanging on to their marriage reluctantly.
One deeded the home to the other live like a roomate or one moved out and found a roomate to pay help with mortgage. People are praying the market will stabilize next year and to unload or refine.
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March 17 2009
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Its possible. Can you get a name off the loan without a refi? I was not sure if you can or not. 
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January 29 2009
will your soon to be ex, sign the home over to you? If there is currently no equity, then that might be an option.
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January 27 2009
 
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Divorcing, gunna have to figure out if to sell or what
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