Texas already has weird home equity refinance. But how does one refinance a home or investment property after a divorce?
Most people think you have to sell the home to get the equity out. Not True.
Simply refinance the mortgage or investment property and give your ex-spouse his/her fair share of the equity. Why complicate an already difficult time with an unwanted move in addition to everything else that's going on in your life?
Why change the kid's schools when you can pull your equity out of the home with a divorce refinance.
With most Texas divorce decrees, you'll need to divide the equity and get your ex-spouse off the mortgage. A divorce equity refinance does both. If you want to keep the home a divorce equity refinance is the way to go.
Or maybe you don't want to keep the home long term, but you just need time to make the right decisions for you and your family. Time to satisfy the divorce decree as well as plan time to make the best decisions regarding homes, schools, and other important stuff. A divorce refinance allows you this luxury of time to think, cool off, and still meet the judge's divorce decree. This way, if you sell-you sell on your terms.
Texas Home Equity loans are already complicated because they have so many rules. Rules like your loan can't exceed 80% of the homes value, 3% rule, but with a divorce refinance you can split the home's equity even over 80%.
It's important you work with someone who knows what they are doing.
Other Texas Equity Loan rules: Texas Equity loans can't exceed 80% of the home's value, you must wait at least 12 days before you can get your cash, the total amount of fees can't exceed 3%. . . yada yada. Lots of rules.
But how does one deal with the 80% rule when refinancing a home due to a divorce? In most divorce situation, there must be an equitable split of assets and for most people the equity in the home must be given to the other party. Divorce Refinancing allows you to keep the home and refinance it into your name, removing your ex-spouse's name from the mortgage, title, and your credit. It's like a Texas Equity loan-you get cash out-but the home is refinance into one name.
This is called a divorce refinance and we are experienced with them. Once we close, the the correct equity is given to the right party, and the home is left with the other person. Divorce situations are never easy, but why complicate things by moving you and your kids when you can just do a divorce refinance.
Finally, if you've been divorced in the last year it's probably a good idea to pull your credit just to make sure your credit isn't being negatively effected by your ex-spouse. For example, since you shared credit- credit cards, mortgages, etc-you need to make sure their credit isn't still in your name. Many a client has asked me to do their home loan only to realize-too late-that someone else's credit is on their report. Pulling your credit report after a divorce is probably the best $10 you'll ever spend.
Jon Spears is a licensed Texas mortgage broker in Austin, Tx. In addition to purchase loans and home equity loans, he helps people buy and refinance investment properties to help bolster their retirement goals.
He specializes in Texas Mortgage , refinance and home equity loans at low rates.
He started his mortgage company, mylendingplace.com, in 2005 and has closed millions of dollars in mortgages and refinances. His office is 512-996-8194