Should i sign loan papers for my ex to refinance house. I have been told that i do have to sign but i dont understand because she is getting the loan based on the equity in the house & i believe half of that equity is mine until she is able to refinance & have my name removed from the first loan. Even if me signing for the second loan does in turn pay off the first loan isnt that still allowing them to use my credit as a basis for the loan? Do i have to sign?
2006-07-17 05:43:27 · 3 answers · asked by Lucky me 1 in Politics & Government ➔ Law & Ethics
So the two of you both still own the house? Hmmm..you may want to check with a lawyer first. My thoughts would be that if she can afford to refi, she can afford to buy you out. I'd be careful to figure out what she is doing and why first. Maybe it's in your best interest and maybe not.
My thoughts are that anything that increases her payment increases the odds of default, plus she is dipping into equity that is half yours (so one thought is be sure your half is still there), but if your house is in one of the bubble markets (think Boston, Phoenix, California, NYC, etc.) your house could drop in value over the next few years and that would erode equity too, possibly leaving less than your share left, and maybe even increasing the odds of default.
At a minimum, I'd want some sort of contract stating you are entitled to half the current equity (pre-loan) as a MIMINUM if the house is ever sold or she buys you out. In other words, if there's 80K in there now, she'd have to guarantee you your 40K before she'd make a dime on it down the road (because she is puling out her share now), and then any additional equity would be halved.
Personally, if she can afford an equity loan, it makes a lot more sense to have her refi the first in her own name and buy you out.
If her credit/income isn't sufficient, then raising her payment now is just a huge red flag.
2006-07-17 05:51:20 · answer #1 · answered by Lori A 6 · 0⤊ 0⤋
Brandy,
It depends on the divorce decree. Read through it carefully and see what the divorce decree says. Otherwise, look to the laws of your state on post-divorce property. See a lawyer if in doubt.
-j.
2006-07-17 12:47:45 · answer #2 · answered by classical123 4 · 0⤊ 0⤋
It's a contract! if you really trust her go ahead. BUT, in your best interest speak with your attorney. Obviously it's alot of money, would'nt that be worth a small legal expense.
2006-07-17 12:49:29 · answer #3 · answered by Anonymous · 0⤊ 0⤋