HELOC with only one owner

[Deleted]

So, I've asked my Mortgage guy and haven't heard back yet and I tried googling but I must not be using the correct terms because I cannot find anything to answer my question. 

I'm going through a divorce. Both myself and STBXH are on the title and the current mortgage. I will be buying him out and my mortgage suggested instead of doing a cash-out refi, to instead do a mortgage for the balance of my current mortgage and then a HELOC and use that to pay my STBXH his portion of the equity. 

My question is this. Does anyone know if I could get a HELOC now in my name only even though we are both on the title and current mortgage? My STBXH won't move out saying he has no money, and I was hoping maybe to expedite things and take out a HELOC now to get him to move out and refinance down the road sometime after the divorce is finalized. I don't know if this is even possible and would obviously talk to my lawyer and run it by him to make sure that we have all of the proper documentation in order to make it happen, if it is even something that can happen. 

[tealblue]

This suggests yes it’s possible to do a HELOC only in your name but your soon to be ex May have to sign a paper saying it’s ok to use the house as a lien.

www.investopedia.com/can-married-couples-have-joint-home-equity-loan-5322854


Does a Spouse Need to Be a Co-Borrower on a Home Equity Loan?
A spouse does not need to be listed as the co-borrower on a home equity loan. Still, it’s important to note that, even though a spouse needn’t co-sign, they still may need to consent to the loan in writing.

Generally speaking, a lender cannot require a spouse to co-sign or act as a co-borrower for a mortgage loan if the other spouse is able to qualify based on their own creditworthiness. However, the spouse who is not listed on the loan could be required to sign documentation to make the property that’s used to secure the loan available to the lender should the borrower default.



There is a simple reason for this: The lender wants reassurance that should it be forced to foreclose on the home for default, there would be no obstacles preventing it from assuming ownership of the home. Thus, your spouse might be asked to sign a document that allows the lender to create a valid lien on the home or pass clear title to the lender.

[madringal]

Mortgage lender here - I would do a cash our refi and just pay him out from the proceeds. It kills two birth with one stone. 1) it allows you to take him name off the title (he does have to sign) and it gets you the money. Otherwise you will likely have to do the mortgage and HELOC as two consecutive transactions. The rate is likely to be higher (because it is fixed), but then also less susceptible to the swings of the market. If you have good credit and a good LTV (like below 70%), I would also consider an ARM to get a better rate.

[AdaraMarie]

I uaed a heloc to pay off my X but I did it after the divorce was final and I had assumed the mortgage so I can't speak to that part.
But my X alao didn't want to move out and his lawyer delayed our divorce. I was able to ask my lawyer/judge to order him to move out by a certain date whether things were final or not. Maybe that is something you could pursue.

[dancelnow]

I get why you don’t want to refinance now in your name only with interest rates. Yes, you can do it in your name only, but if he’s on the deed, he will have to sign something saying he approves.

[madisen]

Mortgage lender here.

Your best option if your current mortgage is at a very low rate is to have him quit claim off title, keep the current mortgage, and get a HELOC to buy him out.

It doesn’t hurt you at all to have him on the mortgage on the first still as long as he quit claims off title. He has no more right to the house if you’re awarded it in the divorce and he signs his rights to it away with a quit claim. It’s on him to get advice that he should be off the mortgage also.

Second best option in my mind is to consider a cash out loan once your divorce decree is finalized and you are awarded the house. Fnma and fhlmc have rules in their underwriting guidelines that allow for this scenario to NOT be a cash out loan as long as the proceeds are being used to buy out the ex. So you won’t be hit with cash out rates in this case. However your loan to value would have to be low enough to meet program guidelines.

[cleo29]

One thought, could you do a quit claim deed first? This would remove him from the title. Then you can do the HELOC, if your current interest rate is better than what you can get now.