My spouse and I are divorcing. I'm hoping to remain in our house after
giving her half the equity in the house.
Our house is located in Rutherford Cty, TN and is ~10 years old. It's
estimated
market value is ~$130-$140,000 (we are awaiting the results of an
appraisal).
My primary reason for wanting to remain in the house is to maintain a
sense of continuity for my 10 yo son.
We have ~ $81,000. in equity. My annual net income is ~$31,200. We
have some savings but I feel this will be depleted by the divorce
process.
I need to know if I would be able to afford the house after
re-financing to provide my spouse with half the equity. Are their any
creative financing methods that might help? Any additional
suggestions?

<Since you already have a lender it would be worth trying negotiate a
deal for refinancing with them. By finding the best quote possible
with an alternative lender you can present your current lender with
this quote and threaten to take away your business unless they give
you a better deal. Most lenders will give you a better deal in order
to keep your business. Even a cut of a fraction of a per cent can save
you thousands of dollars over the life of your mortgage.

Mortgage quote.
Based on the highest price for your house of $140,000 and deducting
your share of the equity at $40,500, you will need a mortgage for
$99,500.

The following quote was found via interest.com. 
A 30 year mortgage at  5.75% with Peach State Mortgage costs $580.

U.S. Department of Housing and Urban Development.
HUD has a number of programs to help people buy or refinance their
house. Links to the programs are given below. The FHA mortgage
insurance program helps by lowering the costs of loans. It also
encourages lenders to make loans by protecting the lender against loan
default.

Local programs.
Murfreesboro/Rutherford County has an affordable housing assistance
program. There are no details given online but the link below leads to
contact details.

Co-ownership.
An option that has often been used in the UK where property prices are
extremely high is co-ownership. It involves finding another person to
share the house with you. You share the mortgage payment and each owns
a portion of the house. A legal agreement needs to be drawn up
covering all the conditions, usually in the form of a trust. This
means that there are additional legal fees. The obvious disadvantage
is that you have to share the house with someone else which involves
all the usual problems of co-habiting. However it can be a solution to
temporary financial problems. The ideal co-owner would be someone
young who is looking for a way to get on the property ladder with the
intention of moving on after a few years. It allows you time to
improve your finances so that you are in a better position to take
over the entire mortgage. The link below to ‘The ultimate house mates’
describes this method.

THDA
You satisfy the earning conditions for the THDA’s homeownership
program but the value of your house is too high. They generally
provide loans to first time buyers but there exceptions if your house
is in a particular area. Rutherford county doesn’t qualify. This
program may be useful if you decide to sell and move to another area.

<Additional links:>

<Online mortgage quote.>
<http://www.interest.com/tennessee/>

<The ultimate house mates.> 
<http://www.ivenus.com/finance/features/CP-Feature-buy_house_w_friends-wk58.asp>

<Peach State Mortgage>
<http://www.peachstatemortgage.com/>

<Mortgage and financial calculators.>
<http://www.interest.com/hugh/calc/>

<HUD’s Mortgage Insurance Programs>
<http://www.hud.gov/buying/insured.cfm>

<Single family housing programs.>
<http://www.hud.gov/funds/singlefamily.cfm>

<FHA mortgage insurance program>
<http://www.hud.gov/progdesc/203b--df.cfm>

<Rutherford County – housing program.>
<http://www.hud.gov/local/tn/buying/buyingprgmslocal.cfm#mu>

<THDA>
<http://www.state.tn.us/thda/Programs/Mortgage/hmownshp.html>


<Search strategy:>

<buying a house" alternative to mortgage>
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22buying+a+house%22&as_q=alternative+to+mortgage>

<Mortgage calculator>
<://www.google.com/search?as_q=&num=10&hl=en&ie=ISO-8859-1&btnG=Google+Search&as_epq=mortgage+calculator&as_oq=&as_eq=uk&lr=&as_ft=i&as_filetype=&as_qdr=all&as_occt=any&as_dt=i&as_sitesearch=&safe=images>


<Hope this helps.>

Thank you.

What will your wife be doing with the money?  If she doesn't have an
immediate need for the cash, maybe she can make the $40,500 a 2nd
mortgage on the house.  So, intead of walking away with the money now,
she would have it invested.  You could offer her a interest rate of
5%, which is better than she could get at any bank.  Doing this would
add about $217/mo on top of your current payment.  But, if you haven't
refinanced in awhile, you should take advantage of these low rates and
just refinance to get cash out.  The payment you'll be talking about,
though, will be rather high for someone with your income.  Will you be
receiving child support from her if you are keeping the child?  Maybe
this amount will cover the additional cost of the house.

The best way to provide your 10 year old son with continuity is to
show him that he is more important that any disagreement with your
wife by not getting divorced.

First of all, the judge, in all likelihood, will not force you into an
impossible situation, which is to say that he/she won't force you to
pay cash when you can't raise the cash.

In Michigan, these situations are typically handled by either: (1) the
spouse moving out has a lien on the title which permits the equity to
be paid out upon the sale of the home and perhaps to a max term ("upon
sale or in five years, whichever is to occur first"); or to have the
spouse receive payments over time (say, ten years at 7%, or some
such).

Your attorney should be able to lay out the options.  I hope and trust
that you have an attorney.  Best of luck.

weisstho-ga

tomtgs:

Additional information is needed to tell whether or not you would
qualify for a refinance/new mortgage of approximately $101,000; e.g.
is your credit record good? Do you have other monthly payments (credit
cards, car payment etc.)? Will you be paying alimony or child support
to your ex-spouse-to-be? For the sake of discussion, using the
following assumptions, you should have no problem qualifying for a
conventional 30-year fixed-rate loan:

- property taxes $1500
- annual homeowners insurance premium $600
- loan amount $101,000 ($99,500 plus 1 point -- one percent of loan
amount --plus other closing costs; lenders in your area could charge
differently)
- interest rate 5.75%; 30-year term; fixed-rate
- total monthly payment $764.41 ($589.41 Principal & Interest,$125
property Taxes, $50 homeowners Insurance)

This gives you a "housing ratio" of 29.4% ($764.41 PITI payment
divided by $2600 monthly income). This is within lending industry
guidelines. BUT, too much in other monthly payments (if any) could
adversely affect your ability to get the loan. You could have up to
$250-350 in other payments, and still qualify for the loan (again, any
legally required payments to your ex-spouse-to-be, e.g. alimony or
child support, must be included in these payment totals). These debt
ratios guidelines are not carved in stone; get guidance from a
reputable -- repeat, reputable -- real estate lender/loan officer.

If you proceed, try for a conventional loan, and avoid FHA loan, if at
all possible.

Hope this info is useful, and good luck!

Thank you. My wife plans to purchase a smaller house or duplex with
her share of the equity. I won't be receiving child support. We are
working on a 50/50 shared parenting plan, and in all probability I
will be paying child support since my net income is ~double hers(per
my attorney), though the amount will likely be lessened because of the
50/50 parenting plan.
The idea divorce sickens me, it is not choice, and since being
informed of it's filing, on Father's day of this year, my life has
been an emotional hell. I have pleaded that she reconsider, but she no
longer loves me, and so her mind is made up. The one thing that I have
learned in this process is that, the father as a parent, no matter how
involved, or loving, no matter how responsible is virtually considered
a criminal having to defend himself against any claim made against
him. I stand to lose my son, much of our savings, house and even a
portion of my retirement savings, including social security.
To remain in the marriage and work things out would be by far my first
choice, but I'm not given that option.