Exes can work together to refinance home

Posted5/3/2019 6:00 AM

Q. My husband and I divorced about four years ago. Part of the settlement was that I got to stay in our house with our kids until the youngest graduated high school. That will happen in about four years.

We had bad credit when we bought this house and because of that we have a very high interest rate. I've got a pretty good job now and neither of us have had any credit problems over the last few years, so I think we could probably qualify for a loan with a lower interest rate. This is important to me as I am the one paying the mortgage.


Unfortunately, anything that might help me, my ex is not interested in. Do I need his permission to refinance? Can you think of any other options I may have?

A. I'm guessing what your settlement agreement says is that you will either refinance or sell your current property once your youngest graduates high school. Your ex doesn't care which you do; he's only interested in removing himself from the mortgage obligation and collecting whatever share of the property he was awarded.

If you can qualify for a loan on your own in the amount of your existing loan balance plus his share, your ex likely has no say in the matter. I would suggest speaking to a loan officer to determine if that is an option for you. If you still need your ex's income to qualify, things get a bit trickier.

Of course, if he was a nice guy and wanted to help you and the kids, he would cooperate in obtaining a loan at the lower rate. He would probably insist you pay the application fees for the new loan, so you would have to calculate whether the monthly savings were worth the upfront cost. He would also likely insist he be removed from the mortgage obligation as previously agreed. So, multiply the monthly savings times 48 months and compare that figure to the upfront cost of the refinance to determine if this makes sense.

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If you need his income but he refuses to cooperate, you would need to petition the court that entered your judgment for dissolution of marriage. You would indicate to the court the refinance would have no impact on him but would save you and the kids $X per month. You may get a judge to order him to cooperate.

It's possible just the filing of the petition would motivate him to be more cooperative.

Q. I owned a townhouse a few years before I was married. I've been married a couple years now and my wife wants to be on the deed in case something happens to me. What do we need to do to get her on the deed?

A. Technically, your wife wishes to be on the title to the property. Deeds are documents that convey title.

What you wish to accomplish is basic and routine. You would execute and record a quitclaim deed, conveying the property from yourself to yourself and your wife as either joint tenants or tenants by the entireties. Once recorded, your wife would be "in title." Presuming you hold the property in either joint tenancy or as tenants by the entireties, in the event one of you dies, the property automatically passes to the surviving spouse.

Q. I signed a contract to purchase a small house for cash. I now wish to get a loan. My Realtor says I cannot do that because I agreed to pay cash. Is this true?

A. No. By agreeing to purchase the house for cash, you agreed that the contract would not be contingent upon you obtaining a loan. However, so long as you show up at the closing table on or before the contract closing date with enough funds to complete the purchase, no one will care where the funds came from. Just be aware that if you are unable to obtain the loan and you fail to close, you will likely be in default, absent any other intervening circumstances.

• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tom@thomasresnicklaw.com or call (847) 359-8983.

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