The Financial Disasters That Comes With Divorce: Mortgage & Equity

[BarkingGhostar]

The soon to be ex-wife and I bought our home back in 2001. We were on a no doc, 3-year arm before converting to a conventional 30-year mortgage, which we got at 5.875% in 2003. We owe $98,700 (12 years left) on it and now in the midst of a divorce she is seeking her portion of the equity. I went onto Bankrate.com and found some fairly low offerings, including one at just under 2% which a straight up cash out $100-135K equity for the STBXW on a 15-year refinance and maintain the same month note thanks to the much lower rates. And while we had been advised to just sell the home and divide the resulting equity I think that is currently a bad move considering the current hot seller's market out there.

Yes, we could sell the home for even more than I think it is worth (~$300K; paid $250K in 2001) but the end result would be the distributed equity would make it much harder financially to individually buy another home even with $100K for each of us. This is why I was leaning hard for one of us to keep the home and it looks like it will be me. And because this divorce isn't coming from me I am the one that seems to be very concerned with where and how the STBXW is going to live and survive. Renting a room in someone's home is $900/month. One-bedroom apartments are running $1200-1600/month. And the only thing my wife can afford in a home is is >$270K and there are barely any of those houses out there and they are all already Pending or Under Contract.

And after two weeks of trying to get the new STBXW to understand all of this she asks about renting space in our marital home. DON'T EVEN ASK ME ABOUT THE PSYCHOLOGY IN ALL OF THIS MESS. But I agree and offer to stay as-is for rent say, $750/mo for the next three years (go see my other thread on The Financial Disasters That Comes With Divorce) as it will pay for my medical benefits through her employer via COBRA. Afterwards if she is still here--I gave up predicting the future when she announced the divorce--then it'll be more. But now I am more concern than ever as my home went from a dual-income that provided a safety net in case I lost my job (AT&T places employees under the threat of surplus 24x7) to one where I essentially give up. Ain't the American Dream dreamy?

This thread eventually took quite the turn, which makes it more suitable for P&N . . . I guess. Let the grievance and judgement continue! Just please be careful with the terms you employ.

Perknose
Forum Director

 

[KB]

You might get better advice in L&R, but having the EX stay in your house is a bad idea. It will eat you up inside when she is bringing home man after man.
Divorce is tough, but don't make it tougher. Sell the house and move on. No amount of monetary savings will save your sanity.

 

[herm0016]

no way. you can find another roommate if you want. keep the house, find another room mate. tell her to gtfo.

 

[Brainonska511]

You might get better advice in L&R, but having the EX stay in your house is a bad idea. It will eat you up inside when she is bringing home man after man.
Divorce is tough, but don't make it tougher. Sell the house and move on. No amount of monetary savings will save your sanity.

Also, hot sellers market - seems like a no-brainer for selling: sell the house and rent a place until market cools off again.

 

[nakedfrog]

One more voice to the chorus of: having her stay there is bad mojo.

 

[BarkingGhostar]

You might get better advice in L&R, but having the EX stay in your house is a bad idea. It will eat you up inside when she is bringing home man after man.
Divorce is tough, but don't make it tougher. Sell the house and move on. No amount of monetary savings will save your sanity.

Already set the ground rules. If I see another man he'll be dodging, unsuccessfully, lead.

Also, hot sellers market - seems like a no-brainer for selling: sell the house and rent a place until market cools off again.

I'm not going to spend $1600/mo on renting a one bedroom apartment compared to spending $300 more gets me 3500 square feet.

 

[pauldun170]

Already set the ground rules. If I see another man he'll be dodging, unsuccessfully, lead.

No you won't.
You are not going to murder anyone. You are not going to assault anyone.
You might complain and make an ass of your self but no, you are not going to murder anyone if your wife (who is going to be in the house that the two of you shared for decades because YOU said not to sell instead of following advice of others) brings a boyfriend home.

Over the top bullshit statements aren't going to do you any favors in this situation where your wife wants to divorce you.
Man the fuck up. Accept the fact that your marriage failed and your wife wants to start a new a life.
Learn to talk like a mature adult and start the path of rebuilding your life.
Don't want to others being brought into your shared home?
That's a simple request "Lets agree that we will not have any guests without discussing it first"

Sell the fucking house and bite the bullet with an apartment. Bring some closure to the divorce as soon as possible and don't be a little bitch if your wife moves on faster than you.
Once everything is all done and you don't have to deal with each other, life gets better if you allow it to get better.
The financial hit sucks but millions have gone through this, had horrible divorces and come out happy on the other end.


eidt- Sorry to be harsh and I'm truly sorry for what you are going through.

 

[Brainonska511]

Already set the ground rules. If I see another man he'll be dodging, unsuccessfully, lead.

Your soon to be ex-wife is not a piece of property. Get over yourself. You're not going to assault or murder someone because your roommate wants to be involved with someone else.

I'm not going to spend $1600/mo on renting a one bedroom apartment compared to spending $300 more gets me 3500 square feet.

It's part of the potential pitfalls of getting divorced. Put on your grown-up pants and deal with it. Suck up a lease for a year, or find another roommate, or find a cheaper place to move to, or go buy a cheaper smaller place. Do you need 3500 sqft to yourself? It also seems like moving would be the best way to help bring closure to this part of your life, as annoying as it would be financially.

 

[MrSquished]

Hard no to having your ex as a roommate. Inconceivable.

If you want to keep the house, get another roommate. It also sounds like a lot of house for one person. Can't you sell and get a nice 2br condo or something if you don't want to become a renter again?

 

[Captante]

Already set the ground rules. If I see another man he'll be dodging, unsuccessfully, lead

Great idea .... what could possibly go wrong?



Don't even CONSIDER actually DOING THIS !!!!!

It will be EXPONENTIALLY worse then you can imagine! (and you will be utterly powerless except maybe to get yourself arrested/locked up)

If you think you feel terrible now, wait till a few months into that kind of living ... you are NO MATCH for a woman (especially one who knows your EVERY weakness) when it comes to psychological warfare and she WILL fvck with you endlessly no matter what she "agrees" to now.

Seriously your situation smacks of impending cheez-level fail.




EDIT: Seriously I can't stress these points enough:

(1) You CANNOT trust your "feels" on this right now this close to the event so TAKE OUR ADVICE! (you'll be glad later)

(2) If peace of mind means ANYTHING to you at all, PULL THE RIPCORD NOW NOW NOW! *(while there's still time)

(3) Any experienced divorce-attorney worth a hill of beans would be telling you the same things.

 

[s0me0nesmind1]

I remember watching a Ted talk or something from a divorce lawyer.....

She coincidentally has been divorced herself 3 times and mentioned that in her talk.

She must know her shit


Anyhow, Captante above makes very reasonable points above that sound like something that should be strictly taken to heart if you want to come out of this alive, sane, and able to conquer again.

 

[RearAdmiral]

Never trust someone who agrees to an ARM.

 

[nakedfrog]

Meh, I had a 5/1 ARM when I bought my first house, because it was the only way I could realistically get one, and I wanted to quickly move out of a neighborhood where shootings were literally occurring on the street where I lived, a few blocks from where my kid went to school. Predictably, the rate went up 2 years later, and I refinanced.

 

[s0me0nesmind1]

Never trust someone who agrees to an ARM.

ARM isn't always bad.

On my last house we refinanced with Pentagon Federal Credit Union - or "PenFed". They are well known for low rates - and I've seen their stuff like promos listed on Slickdeals.

Anyhow, they had one listed where they covered EVERY little bit of closing costs, title - EVERYTHING, and we got a 5/5 ARM for 2.75% - which was amazing at the time (this was...7...8 or so years ago?)

That means they could only potentially change the rate every 5 years, and they were limited in how much they could raise it at each 5 year set - and also limited on how much total to raise it. I believe we were currently at 5.00% at the time, so moving down 2.25%.

We ended up refinancing with them, they covered all the costs, and we just paid off the house before the first 5-years was even up heh.


My wife was scared of the ARM too and was like "OMG are you insane?" but after walking her through the numbers she understood where i was coming from.

 

[RearAdmiral]

ARM isn't always bad.

On my last house we refinanced with Pentagon Federal Credit Union - or "PenFed". They are well known for low rates - and I've seen their stuff like promos listed on Slickdeals.

Anyhow, they had one listed where they covered EVERY little bit of closing costs, title - EVERYTHING, and we got a 5/5 ARM for 2.75% - which was amazing at the time (this was...7...8 or so years ago?)

That means they could only potentially change the rate every 5 years, and they were limited in how much they could raise it at each 5 year set - and also limited on how much total to raise it. I believe we were currently at 5.00% at the time, so moving down 2.25%.

We ended up refinancing with them, they covered all the costs, and we just paid off the house before the first 5-years was even up heh.


My wife was scared of the ARM too and was like "OMG are you insane?" but after walking her through the numbers she understood where i was coming from.

Yes one could handle them responsibly, but then there is no joke.

 

[Torn Mind]

I know one dude on these boards who thinks you should let her in and give a her a second chance or else you're a misogynist who doesn't care about women.

 

[Torn Mind]

On a more serious note, have you ever rented out a space in your locale as a landlord before and know the eviction laws, money claims laws, etc? And not just the written laws, the "kinesthetic laws". It's not easy being a landlord with strangers. It's even harder being one with a stranger you're familiar with, so to speak.

Cuz your former partner might stop paying. Year-long or longer leases can require 30 days notice...possibly 90 in more liberal locales....

Once she becomes a tenant...the only legal way out if she stays yet does not pay or starts overwhelming you is...eviction.

Understand, possession is granted to her as a tenant. You want to be very clear what she has exculsive "possession" of. Give her one room, and wall off everything else...better buy some Mul-T-lock grade locks. Common areas are free game
You'll basically have to do a whole-house move-in inspection with her.
Oh, and if the bathrooms get damaged, well too bad because privacy means no cameras to catch people in the act. You could try taking it off the security deposit if you charge one.


If you want to sue for money, the judgment part is easy. Garnishment is much harder; she just has to move her assets to another account you don't know about.

Your ex-to-be might pull some surprise knowledge on how to be a "professional tenant" from her youth.

Also, got a pre-nup?

Also, you might wanna burn your Playboys, Maxim, and Babe thread pics in case she's a master snoop.

Now, she may or may not actually go far, but this is the full potential level of chaos you could be dealing with.

 

[Muse]

I bought a DVD video that I didn't watch for a while but finally did. It's a MF eye opener:

Divorce Corp - Wikipedia

en.wikipedia.org

I mean, watch this before you get married!

Amazon.com: Divorce Corp. : Movies & TV

Amazon.com: Divorce Corp. : Movies & TV

www.amazon.com

Just one of the Amazon customer reviews:

FAMILY COURT=CORRUPTION
Reviewed in the United States on January 23, 2015
Verified Purchase
I strongly suggest everyone to watch this film before you get engaged married or have any children divorce in the U.S. is more than a 50 billion dollar a year industry this film will tell you who pays out this money and who gets the money and also according to this film 50% of marriages end in divorce, the family court system in America is broken beyond repair it needs to be thrown out and replaced with the kind of system they have in Scandinavia this film compares divorce in America to divorce in Scandinavia. And also the family courts are not governed by THE U.S. CONSTITUTION, that is an open invitation for corruption and greed which is what this film talks about, the individual stories of people who have been victimized by this corrupt family court system is incredible and sad.
12 people found this helpful

 

[Muse]

Never trust someone who agrees to an ARM.

Please demystify... what is an ARM?

Edit: Oh, adjustable rate mortgage.

 

[Greenman]

Please demystify... what is an ARM?

Edit: Oh, adjustable rate mortgage.

Adjustable Rate Mortgage

 

[Captante]

Adjustable Rate Mortgage

Also what your ex-wife's lawyer sticks up your a$$ and extracts half your net worth with!

 

[Muse]

Also what your ex-wife's lawyer sticks up your a$$ and extracts half your net worth with!

Yup. Here's a shall we say exceptional case:

Jeff Bezo's ex-wife has lately launched one of the most (if not the most) impressive philanthropic campaigns ever. I heard on TV news about it at least twice. Billions of dollars to over 250 organizations, most if not all non-profits, and the ones I heard of appear to be doing great work. Jeff himself is flying into space fulfilling a long time dream.

2020: MacKenzie Bezos Scott net worth: She is now the wealthiest woman in the world worth $67.4 billion

MacKenzie Scott Is Giving Away Another $2.7 Billion To 286 Organizations

Scott said she is "attempting to give away a fortune that was enabled by systems in need of change." She has given away more $8 billion of her fortune so far.

www.npr.org

 

[Torn Mind]

Also what your ex-wife's lawyer sticks up your a$$ and extracts half your net worth with!

Men can be just as cunning and mind-crushing....

My dad was such a guy.

Gives check to mom for to fund dog food. $50 bucks for a Rottweiler(he bought it not out of love for the dog but protection). So when mom gets welfare via food stamps. He snitches and show the check stating she didn't report all sources of money. The state was more than happy to inflict financial punishment and issue a judgment. Now, she has not paid a cent even to this day.

Also, managed to convince my mom to open a bank account to store her cash. He draws it down and closes it, states to the court that she did when she had no knowledge(immigrant with limited English at the time). The bank provided her with proof that she never accessed the account but by then the hearing had passed and to appeal over such a small thing....

Plus the lawyer that she and a friend(French ancestry) she met via going to the local government agency pretty much took the money to not battle for custody but just consent to the other side while taking the money. The friend paid the lawyer for my mom because my mom had little money. My mom wanted to battle for custody but the lawyer saw her as easy money because her limited English and funds meant she was not a threat to report his potential misconduct to the bar or enforcing authorities.

Many folks don't know legal smarts of bad people until divorce actually happens.

Oh yeah, he had a prior marriage and allocated nearly all of his resources to his favorite, which would be my sister-in-law(who is about 50), the inheritance to me is mostly genes and that I can throw around his education credentials. Supposedly threre was some trust established for me and sis, but the process required maintaining contact with my half-sister...which we did not...so if there was anything, half-sis got it. My mother's hard assets like jewelery were also swindled away.

 

[highland145]

I know one dude on these boards who thinks you should let her in and give a her a second chance or else you're a misogynist who doesn't care about women.

We still don't have pics so hard to decide.

 

[darkswordsman17]

Where do you live that you can only sell a home you bought for $250k 20 years ago for only $50k more now?