Heya Michael -
[ I was going to simply let her remain and take
my 50% of the equity at divorce settlement, but someone told me that I'd
get screwed somehow in that and that the house should be sold instead.
To my understanding, it shouldn't matter, as the house equity is
determined by the appraised value minus the mortgage balance.]
>From what I know of buying and selling houses, and divorces -
1. the equity amount moves over time, depending on the divorce settlement
date.
2. the mortgage balance amount moves based on 'house selling date' and
interest computations of the principal mortgage amount.
for example -
if the house was sold NOW and the mortgage paid off, there would most
likely be a dollar amount of equity recaptured because you weren't paying
interest on the note any longer. This increases the equity value, at
least on paper, as today's equity value is based on the termination date
of the current mortgage. Pay off the mortgage early? That equity amount
increases.
IIWY - make a clean sweep NOW. If she wants to keep the house, then
absolutely SELL the house to her and pay off the mortgage, taking 50
percent of the equity amount, and have her make a new mortgage solely in
her name.
If you haven't reviewed your mortgage paperwork recently, do so. If there
is a penalty payment to make for paying off the mortgage early, you better
rethink your position. OTOH, the house does not have to be 'SOLD' for the
mortgage to be redone. If it is easier to take out your half of equity,
and a new mortgage written up with the same mortgage company in HER name,
then DO IT. At least the yearly tax burden on the house is removed from
you, regardless of which way you choose to get out from the house note.
Warmest Regards [Bill]
--
William Sanders / efGroup {rmv the DOT BOB to reply}
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