A friend of mine is going through divorce but wants to keep the house

[Luka Milicevic]

Hey BP,

I have a good friend of mine who is currently going through a divorce. 

He has two options with the house

1-sell and split the proceeds

2-Keep the house and payout his spouses equity portion over the next 10 years

He wants to keep the house as he has a low interest rate that he will never be able to get again. 

One of the suggestions was to assume the loan to get her off the mortgage, but the lender said that he is "pretty sure" that mortgage assumptions are only possible when someone is purchasing the property.

My question is, are there scenarios or suggestions for keeping the house and existing loan and not having to refinance to get her off the loan? 

[Caroline Gerardo]

Community property state?

Your ex asks you to wait ten years for the money? Nope. People want to move on and not call and ask where the check is for the next 120 months. 

She is likely smart enough to not want to stay on the mortgage with him for the next 20 years as it could harm her credit or make it impossible to buy a property. What is he willing to pay her EXTRA for this luxury to him; but harm to her? PREPAY a life insurance policy in her sole name not revocable?  Pay her alimony as a bonus to do this?

How much does he have to pay her? How much equity, value of subject and loan amount, 401k, IRA, checking, savings?

So lets guess he owes her $200000. Is there enough equity to get a HELOC and take some cash out of savings to make up the gap? Then pay her an extra $50000 for not forcing him to refinance.

The servicer is not going to magically let him assume the mortgage in his own name. He could contact them, with a court order and if his financial situation is SUPERIOR to when he got the loan and he agreed to make some lump sum payment they might consider it. The servicer/trustee loses money when an assumption occurs (it costs them to process it and they are also losing a creditor). The note or riders have to spell out they allow assumption in the event of divorce or they have zero motivation to help him. 99% there is no such language in the note allowing for a divorce. 

Other option is to refinance but rate increases.

Other option is to sell.

Other option is to stall until he decides.

Other option is to reconcile.