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Operation GTFO - amicable divorce, refinancing

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  • Operation GTFO - amicable divorce, refinancing

    Hi,

    Extremely amicable divorce about to happen. No drama or fighting. No one’s Going after anyone, and no-one will be fighting for anything in court.

    We are married and have a house with both of our names on the mortgage. The 5 year closed mortgage is up for renewal in January. We put 20% down when we bought it. She’s keeping the house and the 20% down payment. She will be able to get refinancing with the 20%. I received a large inheritance which I will use towards my own house.

    Basically what I want is to no longer hold title to the property or have any interest in it, to remove my name from the mortgage and utilities etc, and be able to get my own mortgage.

    I know very little about divorce and separation. My questions and concerns:

    We obviously want to go to the bank and get the mortgage changed with only her name on it. But I need to know the correct order of things. If we just go to the bank will they even be able to help her with refinancing or any of that jazz while the property is still in both of our names? Or will they tell us that they cannot do a thing until we present them with a separation agreement, or document ‘x’ or ‘y’ from a lawyer?

    Lawyer first or bank first? Do we have to go to a lawyer at all? Do we need a separation agreement? If we do, do we have to see the lawyer before we can get anything changed at the bank, or bank first then lawyer, or doesn’t matter?

    My goal: get my own mortgage, look for a house I like, buy the house, and GTFO. The problem: being married, owning a house with someone, having a current mortgage with someone will prevent me from getting my own mortgage.

    Thanks for any replies. If any of this sounds confusing, it’s due to my limited understanding of how this all works. Operation GTFO has commenced.

  • #2
    First you go to your mortgage provider and make sure they would be willing to let your ex assume the entire mortgage solely on her income. They will write up a letter to that effect. Just like getting preapproved, it doesn't mean a purchase has to happen.

    Then you draw up a legal separation agreement, detailing who gets what in the divorce. Include a paragraph about your ex gets the house. You will need independent legal advice, and the family lawyers will want to see the letter from the mortgage company, to make sure that division is even possible. They will also want to tinker with your wording and make you spend $1000s on legal fees. You will need to reign them in.

    Then you see a real estate lawyer, and get yourself off the title. This is done just like a purchase, to the extent that you are selling your half of the house to your ex, for $1. It actually involves two lawyers, but in my experience the first one will do all the work and then just ask another one in their firm to cosign. One represents the seller (both of you) and one represents the buyer (your ex). They will want to see the separation agreement and the letter from the mortgage company. You will get a new deed that just has your ex's name on it. This costs less than $1000, the same amount the lawyer costs when you buy a house from strangers.

    Take the new deed and the separation agreement back to the mortgage company, and they will remove your name from the mortgage. Do this step ASAP after the previous one - disaster could strike while you are still liable for a huge debt that you haven't got any collateral for anymore.

    It has to be done in this order. A mortgage company will not take a name off the mortgage when that name is still on the title.

    Comment


    • #3
      Are we allowed to choose not to see family lawyers for independent advice and just do it without advice? Can we choose not to make a separation agreement? If a separation agreement is required, can we just find a template online and do it ourselves?

      Can we just go straight to the real estate lawyer and get a new deed with a DIY separation agreement and give that to the bank?

      Without having to spend thousands on family lawyers

      Comment


      • #4
        Originally posted by toilet View Post
        Are we allowed to choose not to see family lawyers for independent advice and just do it without advice? Can we choose not to make a separation agreement? If a separation agreement is required, can we just find a template online and do it ourselves?

        Can we just go straight to the real estate lawyer and get a new deed with a DIY separation agreement and give that to the bank?

        Without having to spend thousands on family lawyers
        You can get a separation agreement template and use the parts you need, and bring it to lawyers when you are happy with it and ready to sign. But an essential part of the process is called independent legal advice (ILA). You need to be able to prove that you each had the advice of a lawyer and completely understood what you were signing, especially what you were giving up. This protects both of you from having the agreement overturned in the future with the excuse of "I didn't understand!"

        For example, it sounds like you are not getting back any money from your shared equity in the house, but just giving it to your ex. Are you getting anything else in return? Keeping your pension instead of dividing it? Stuff like that? The separation agreement codifies it. If you are really just giving your ex the house, an unfair equalization, the ILA protects her from you being able to come back years from now and demand your share.

        It won't cost thousands, unless you let your lawyers off the short leash you want to keep them on.

        For example, my ex and I spent a few hundred dollars on mediation getting a separation agreement drawn up that we were both happy with. I spent several THOUSAND dollars on my ILA, because the lawyer I picked (based on convenient office location - very bad move on my part!) went all crazy re-writing it with legal language he liked better, and arguing with my ex's lawyer over minutiae. I didn't know what I was doing at the start at all! I found ODF when I was trying to do my own research to understand what my lawyer was telling me and save costs, and learned way more here.

        Knowing what I know now, I would have just said, 'read it over, make sure it says what I want, and sign the bottom.' If the first lawyer you try balks at that, find another, and so on.

        Funny, isn't it? I sometimes wonder how the world would be different if you had to get ILA before you signed the marriage contract, but then I remember that nobody cares about it because nobody believes their marriage will fail.

        Comment


        • #5
          Would she qualify for re-financing based on her own income ? Will she be getting or asking for any spousal support?

          Are you sure you want to give up 20% down payment and 5 years worth if mortgage payments? How much was the house when you bought it, and how much is it worth now ? I wouldn't just give her the house and all that money like that, unless I was rich of course. Sort of like Mr. Bean and what he did for his divorce.
          Last edited by trinton; 11-05-2017, 12:39 AM.

          Comment

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