Yes, you may pull the equity of your house to pay off your ex!

 

The banks will let you do this as a cash-out refinance up to 90% of the home value, instead of the normal 80%. This is called a special purpose refinance (the purpose being to get someone out of your life-fast).

 

 

On occasion, we own property with someone whom we no longer want to live with. In this instance, we strike a deal to split up, stay in the home and pay the other offer. Assuming it is a reasonable sum, the way to get the money is to do the cash out refinance, pay off the current mortgage and take the necessary equity out to say bye-bye.  Under the new rules for mortgages, lenders have limited the amount of equity you can rip out of a house to prevent people from going under….. Good idea.

 

In this case, they will allow it to buy your freedom. What do you do?

 

• Show proof you are both currently on the deed
• Show the agreement made to separate and the amount to be paid
• Provide a copy of the new deed, removing the other
• Paper trail the money being paid at the closing (check, wire and closing statement) 

Make sure you can really afford this house on your own and are not just keeping it for spite- like the kids and the cat.

 

Dale Siegel