Profile picture for mopigletRN

I'm choosing to refinance my house to buy my ex-husband out. Do we split the cost of the refinance?

We have about $112,000 in equity after the appraisal.  I need to give him 50%.  Would we deduct the cost of the refinance from the equity before we split it?  I've also wondered if we would deduct Realtor  fees as if we were selling, although that doesn't seem right since I get to keep the house.
  • March 18 2011 - Redlands
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Answers (12)

Hello,

A few things to consider. 

If you refi and take out money to pay him back how much will your payments go up?  consider how much your payment will cost you extra per month for 15, 30 years 

this is going to cost you money in the long run.   Can you wait until the home is sold?  

Look at what the payment will be principal and interest not just interest you will then be left in a worst situation.   I honestly think you need to calculate these numbers and show him how much this refi is going to cost you. 

Looks like a $300 per month payment to me just for his half.  If you keep the loan another 5 years you have had to pay $18,000 to pay hime back.  Not all of that money is going to be deductable.  Talk to a good cpa.  have them write it down for you so you can look at it logically.  Not emotionally.  

What will happen if you take the money out and your value falls, you cant make the payment and you cant sell but he walks with the cash.  I do not belive it is as simple as doing a refi and  buying him out. 


Yes I would divide all costs equally. 
  • April 26 2011
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If you said you would give him half my opinion is to pay what you said and the deductions are done.  Home appraisals are generally lower than value on a refinance anyhow. Why nickel and dime? Sometimes you have to ask yourself, "Did he make you pay half on the first date?"  All that aside, it is between the two of you to settle it. Keep in mind When he buys a house he will have to pay fees as well. Then he has to pay moving expenses, setting up a new place. and of course he will probably end up paying for a few more first dates.
  • April 22 2011
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that sounds fair
  • April 22 2011
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Profile picture for Rita Shaw Broker
Have you asked him if he will split the cost? Open communication is important.
  • April 11 2011
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Profile picture for Ball3720

Very often, it is NOT a wise decision to hold onto the house...let me ask you a very simple question:  if your divorce was already finalized and you had $50k in your bank account to pay for your house decision, would you then buy a house with the exact same characteristics (i.e., your house); or would you buy something more affordable, or even rent?  I ask this, because the statistics are against you holding onto this house for the next five years.  Hard as it was to afford it on two salaries, now you have one (and possibly spousal and/or child support, but these will not last forever).  When you have a financial crisis (you WILL!), do you have cash reserves to face it?  If not, then why skate on thin ice?  Sell the house, split the proceeds, and rent for a few years while you seek to build up your assets.  As recent history has shown, the investment in a home does not guarantee that the home will increase in value.  There are still a LOT of foreclosures on the market, and there will be more.

  • March 20 2011
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'll go against the grain here.  Most of the spousal buyouts I see the cost of the refi is also split.

even further,  I just did one where the ex, being bought out, had to pay all the closing costs. 
  • March 19 2011
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Profile picture for Blue Nile
I'm with Dan on this one.  If you are getting a new mortgage in your name only, that is "your cost" and there is no reason the Ex should be expected to pay anything for your mortgage.
  • March 19 2011
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Profile picture for the_country_hick
"We have about $112,000 in equity after the appraisal.  I need to give him 50%."

To me this is very simple. You owe your ex $56,000. Pay your ex the $56,000 you owe them. How you get your money does not matter. You simply have to get it. If you incur a cost for getting a loan it does not matter. The judge did not say you could pay less than 50% if you refinanced. As such you owe the amount that is agreed on.

If instead you sold the house whatever you got paid you would pay your ex half. That amount could be more or less than the appraised value. Since you wish instead to keep the house you owe your ex half of the appraised value or $56,000.
  • March 18 2011
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Sounds like your choice = your cost.  If it is not spelled out in your agreement then it is up for negotiation with your ex.  If you are not selling then you don't have Realtor fee's.
  • March 18 2011
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A realtor should not be involved in the refinance process.  Is there actually one?

You can split the refinance fees (bank fees, attorney fees, etc) any way you like, as long as a divorce decree doesn't specify anything.



This is not legal advice and is not intended to create an attorney-client relationship.  The post is only an opinion.  You should speak to an attorney for further information.  The poster is licensed only in CT & NY.  Please visit our website for more information about our services. 

  • March 18 2011
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Profile picture for doralgate
Why would a Realtor be involved in a refinance anyways....a definite NO on this. Why pay for something that is not necessary.

I would assume that since it is a shared asset at this point that the cost for the refinance would be split but then again I might be way too nice a person. Hope to never be in this kind of situation....good luck getting all this figured out.

Selling outright and splitting the proceeds after ALL the expenses are deducted is probably the cleanest way to do this....
  • March 18 2011
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Open to negotiation if not specifically written in the divorce decree.

The arguments to split closing fees in equity calculation and to discount appraised value for future expense related to sale have merit.    It is up to the parties involved to determine the impact of them on the final numbers.

One other thing to keep in mind when you apply make sure to apply as a rate and term transaction and not a cash out transaction.   This will allow you a higher LTV (if needed) and can also improve available loan terms for you.   This assumes all proceeds from loan go to the ex and none to you.
  • March 18 2011
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