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  1. #1
    Join Date
    Jul 2012
    Posts
    1

    Default Divorce When the House is Upside-Down

    My question involves a marriage in the state of: Florida

    I've finally made the decision to get a divorce. It's been a long, hard decision. I first made the decision in 2006, backed down, made it again in 2008, then backed down after my wife promised NC with her "friend". Lately she's rekindled the relationship, so I think it's time to move on.

    One of my biggest problems is that we're upside down with the house. We purchased the house in 2006 for $235K. When I was thinking about a divorce in 2006 the value had dropped to $189K and that's one reason I decided to wait. However, the market continues to decline and the value now is about $100K.

    We put $75K down, and our current mortgage balance is $153K, so we're about $53K upside down.

    Because of our income the bank would not accept a short sale unless we agree to a deficiency judgement, which we're not willing to do at this time. We only have about $25K in cash total, so paying the balance down and refinancing is not an option. It's a conventional loan, so it's not covered under any of the government programs to help underwater borrowers.

    I have no interest in staying in the house, however I'm sure my wife would love to. This was a house she wanted, I never liked it or the location.

    My intent is to buy another house shortly after the divorce, so I don't want to do anything that will affect my credit score. I make substantially more than my wife does.

    I'm looking for suggestions.

    Thanks.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: House is Upside Down

    Marriages are easier to get out of than mortgages. Unless you assure the mortgage is paid it WILL negatively affect your credit score. Further, until you get this house sold or you refi'd off the loan, your debt to income ratio is likely to be all out of whack for a new mortgage elsewhere.

  3. #3
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: House is Upside Down

    If you don't have the cash to bring to closing, such that you can sell the house for market value then pay off the balance out of the marital estate, you're telling us that's not an option.

    If you don't want to keep the house, but your wife cannot afford to keep the house, you're ruling out keeping the house as an option.

    If you refuse to negotiate a short sale on terms the bank will accept, you're ruling that out as an option.

    If you rule out harming your credit score, default and bankruptcy aren't options.

    If you rule out all of the options in advance, we have nothing for you.

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