Help! Cash out refinance after a divorce

[Josh Goodman]

I'm living in the home in Southern California that my ex-wife and I purchased before the divorce. We had agreed that we would continue to co-own it and that I would be living long term. Whenever we did sell that we would split the profit 50/50. I do not want to sell anytime soon.

Now due to some questionable financial choices that my ex has made, she wants to do a cash out refinance for $40,000.

There is currently $150k on the mortgage balance and the house should currently appraise for around $375k.

My current mortgage is $1,060.22 and the new 30 year mortgage would be approx. $1,226.00 (I can't afford to make it a 15 year mortgage). I'm going to see if she'll agree to pay the monthly difference between the original mortgage payment and the new mortgage payment but I'm not holding my breath.

I'm currently 7 years into a 30 year mortgage so I hate the fact that the mortgage will be reset to 30 years, so those 7 years of additional payments would cost me around $100k if I stayed in the house long enough to pay it off.

My ex says that if I sign off on this that when I eventually sell the house she would agree to only take her half of the current equity (around $115k) minus the $40k that she'd be taking out now, so around $75k. I would get to keep the rest of the profit when it sells and that she would not ask to do a cash out refinance again in the meantime.

Does this sound like a good deal? I plan on living in this house for at least the next 15-20 years.

If my home's value keeps increasing then it seems like it would be a good deal, but what are the chances that the value will drop below the current $375-$380k and stay under that value long term?

Thanks in advance for your advice. I'm a bit overwhelmed so your help is appreciated!