Ex has $40000 in home equity. She borrowed $20000 against it which has not been paid off. Now she wants her other $20000. I say she can use her remaining equity to pay off the loan and walk away debt-free. What other options are there?
2007-04-20 08:13:27 · 3 answers · asked by Steve C 1 in Business & Finance ➔ Personal Finance
This is a seperation of the owners, use of the word 'ex'. You have the home and she has an interest in the home amounting to $40,000. I hope I get this right. She has acquired half of it already in cash, and she has to pay this back why? If she is entitled to be bought out of the property she should get her additional money upon request unless your divorce order requires she must be making house payments along with you. If you are going to sell the property and you garner more money than you anticipated you do know she will be entitled to additional cash. If I am not translating what you are asking please disregard the answer.... Good Luck.
2007-04-23 15:35:34 · answer #1 · answered by MARY A 2 · 0⤊ 0⤋
I am not sure about the math without putting everything done on paper.
Example
$180,000 property, $100,000 in debt against it.
$80,000 equity = $40,000 for you; $40,000 for her
$100,000 debt = $50,000 for you; $50,000 for her
She borrowed $20,000 against it.
$180,000 property; $120,000 in debt against it.
$60,000 equity = $40,000 for you; $20,000 for her
$120,000 debt = $50,000 for you; $70,000 for her
If you let her walk, you will have $120,000 debt and $60,000 in equity.
But... Did she borrow the money on her own? Really? Is it based on joint credit? Could she come back after you for half of the balance because it was a joint loan?
You math seems right, but divorce can be nasty. Make sure you have documented that the debt (and cash from it) was completely hers. Without that, you may be forced split the debt. It could also matter very much which state you are in. In some states it doesn't matter if she spent every dime. Just the fact that you are married means that you split everything 50/50.
Good Luck. (And as always, contact a CPA or attorney; the $200 bucks will be well spent when it comes to a $20,000 equity shift).
2007-04-20 15:56:01 · answer #2 · answered by JJ 5 · 0⤊ 0⤋
I'm confused, to say the least.
If you have $40K in home equity but owe $20K, you only have $20K in home equity.
Sell the place, and she'd walk away debt-free PLUS have the $20K in actual remaining equity left.
2007-04-20 15:55:05 · answer #3 · answered by Yanswersmonitorsarenazis 5 · 0⤊ 0⤋