Posted on: 16th Jan, 2006 06:32 pm
wife and I are goin thru divorce. wife will not sell condo (joinly owned). will quitclaim deed free me of financial obligation and title responsibilities? please reply...thanks. A. Johnson
My fiancé purchased a home with a former boyfriend. She has been making 100% of the mortgage payment for the last 8 months and we are really wanting to get his name off the mortgage. However, it would cost us nearly $12,000 to refinance. At the beginning of this post, there was mention of 'novation,' but it seems as if novation is a myth more than a practical purchase.
If novation is a thing of the past and refinance does not make financial sense, what sort of impact would this have on the former boyfriend's ability to borrow money for a home of his own? My fiancé has made all the mortgage payments in full and on time so his credit should not be impacted at all.
Any insight would be helpful.
Thanks
If novation is a thing of the past and refinance does not make financial sense, what sort of impact would this have on the former boyfriend's ability to borrow money for a home of his own? My fiancé has made all the mortgage payments in full and on time so his credit should not be impacted at all.
Any insight would be helpful.
Thanks
Hi Guest!
Welcome to forums!
Novation is not a thing of past. However, most lenders prefer a refinance over a novation. A refinance will help them earn money through closing costs. If you and your fiancé are unable to go for a refinance or novation, then the boyfriend's name will remain on the loan and he won't be able to get a new loan. Moreover, if your fiancé defaults on the mortgage payments, it will affect his credit badly.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Novation is not a thing of past. However, most lenders prefer a refinance over a novation. A refinance will help them earn money through closing costs. If you and your fiancé are unable to go for a refinance or novation, then the boyfriend's name will remain on the loan and he won't be able to get a new loan. Moreover, if your fiancé defaults on the mortgage payments, it will affect his credit badly.
Feel free to ask if you've further queries.
Sussane
thank you sussane.
the home loan is a fha loan. our understanding is that fha's cannot be assumed by anyone. however, she has been making the payments herself for the last 8 months. the house was purchased at $190,000 and is now worth a bit less than that. is there something special we can do with an fha loan? do fha loans allow the home owner to refinance at the original purchase price?
obviously, this is a tough predicament due to the fact that we don't want his name on the mortgage anymore, nor can we afford to refinance. but hearing that he won't be able to get another home loan is upsetting.
the home loan is a fha loan. our understanding is that fha's cannot be assumed by anyone. however, she has been making the payments herself for the last 8 months. the house was purchased at $190,000 and is now worth a bit less than that. is there something special we can do with an fha loan? do fha loans allow the home owner to refinance at the original purchase price?
obviously, this is a tough predicament due to the fact that we don't want his name on the mortgage anymore, nor can we afford to refinance. but hearing that he won't be able to get another home loan is upsetting.
Your fiancée can refinance the loan in her name. However, she would be able to refinance the loan only if there is equity in your property. Unless there is 20% equity in the property, the lender won't refinance the loan.
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