Am I making the best financial decision? This is longer than I anticipated, please bear with me, I’m overthinking everything.
I am currently in the middle of a divorce (civil) and in the process of buying my ex out of the family home. We currently owe $260k on the home, with 16 years left, at a 2.5% rate.
We just got the appraisal back, and its now valued at $535k.
We also owe 24k on a HELOC we acquired 2 years ago, at a rate of 4.37%.
In order to buy her out, half is 137.5K, but I need an additional 12K to pay my half of the HELOC. So 149.5k.
However, after some discussions, we have agreed to a 135k loan, to keep my monthly payments just under 3k ($2986), paying off the heloc, which would leave her roughly $111k, with them staying in the home rent/bill free for up to 4 months, until they can find a place of their own. We have been living together (but separately, in our own rooms and not often home when its not our week with the kids…which is a whole different issue) since we separated in August. It has taken us a long time to try and get this figured out, and I want to make sure I’m making the best decision and not shooting myself in the foot.
This second on the mortgage, would be at a 8.75 rate (buying 1 point)
I make 96K a year, in a HCOL city, in California where the average 3bedroom is at least 450k. I have 2 young kids and a teenager at home, so I would need a minimum of 3 bedrooms.
If we sell, it will drag out the process even more, which I do not want. But it feels dumb to walk out of the rate/length of loan on the first mortgage. But I could put at least 110k, into a new home (roughly $450) and the payment would be about $2700 a month, for 30 years.
Our family home is a small (1200sqft) 4 bedroom, on a ¼ acre, that we have put a ton of work into, with neighborhood kids and lifestyle of the 80s, where kids play outside, running from home to home, and I know you never know what you’re going to get with neighbors when you move.
I have 0 debt, (outside the home and heloc), but am also considering selling my paid off SUV that gets 15mpg, (I could sell for roughly 10k), and get a smaller hybrid, to cut down on my gas, which is roughly $400 a month. I’m hoping a car payment would balance the cost in gas, or even a gain. Im thinking a used kia nero or similar that gets roughly 50mpg. I drive at least 60 miles to/from work every work day.
Please tell me…the good, the bad…wtf am I doing?
original posted by lava_saucy to r/personalfinance on Tue, 02 Apr 2024 15:12:04 GMT.