Maybe this sounds like your situation. You and your spouse are separating and it’s getting messy and it’s going to court. Mediation isn’t an option now. You can’t afford the legal fees, pay the bills and maintain the mortgage payments too. You either can’t afford another loan or can’t qualify... so what do you do?
As a mortgage broker that specializes in divorce planning, one of the programs I use often is called a “Half Interest Loan”. If you have enough equity in your home, you alone could just apply for this 2nd position mortgage and your spouse isn’t required to sign anything or even know about it.
So what does it look like? If your both on title on the property as 50/50 joint tenants in common then 50% of the equity is legally yours. You can borrow 50% of your 50%.
Current value of home: $500,000 Current mortgage outstanding: $100,000 Maximum allowed is 75% or $300,000. Your 50% equity is $150,000
You can borrow $75,000 without your spouse ever knowing about it!
Average payment might look like at 13% interest only $800.00 per month, but you have $75,000 in the saving account.
You can’t get this from the bank and most bank people don’t know about alternative private financing options. Only a few handfuls of private lenders have this program.
It’s not cheap either. Your interest rates are 12% and there are 1-3% in fees. You will also need to have an appraisal at your own cost ($400-700 depending on size of house). Even if your home is in litigation (in court) also known as Certificates of Pending Litigation this loan isn’t an issue. Approved!
The one legal issue to be aware of is that when you register a “1/2 interest mortgage” it severs the Joint Tenancy and could have estate/legal implications.
It’s a great product for short term financing while your divvying up your assets . There is no income to qualify and very little documents.
Kiki Berg, Mortgage Expert 778-808-7756