Mortgage News and Notes

August Mortgage Solutions for Divorcing Couples - FAQ

August 27th, 2019 1:44 PM by Steven Hofberg

This month's question is one I hear often. If you have a client facing a similar scenario as part of their separation agreement, I would be happy to speak to you or your client. Please feel free to contact me.

 

Margie Hofberg, President

Residential Mortgage Center

 

I am refinancing to take my spouse off the deed and mortgage. Per our agreement, I have to give her $60,000 for her share of the equity in the marital home. My parents have offered to give me the $60,000 so that I don’t have to increase my loan amount to cover it. Can I do that and, if yes, how would it need to be structured to ensure that I can get my refinance approved?

 

Yes! If the separation agreement specifies that you need to give your spouse $60,000 as part of the refinance/equity buyout, we have to verify the source of funds for the buyout. If the funds are coming from your parents as a gift, they would have to sign a gift letter stating that there is no expectation of repayment. In other words, that it is not a loan. We would also verify that they have the money to give you, and document the transfer of the funds them to either you or the settlement agent.

Posted by Steven Hofberg on August 27th, 2019 1:44 PM

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