Dear Dr. Don,
I am in the process of divorce and I would like to keep the house. We refinanced it about five years ago and now I am looking to refinance the house under just my name. Is it advisable to take out a new home mortgage for 30 years?
— Marge Mortgages
Are you sure that staying in the house is the best decision for you? I’ve heard from a few ex-wives over the years who regretted — at least financially — the decision to keep the house. I will admit, however, that ex-wives who are happy with their decision to keep the house don’t typically write in to me.
The Bankrate feature “Keeping the house in a divorce” provides some additional background on the topic.
It’s often a financial struggle for an ex-wife to qualify for a new home mortgage based solely on her income. The lender may suggest loans other than a 30-year, fixed-rate mortgage in order to qualify you for a mortgage.
While adjustable-rate mortgages may turn your head, a conventional 30-year fixed-rate mortgage is a good choice if you plan on being in the house for many years. Depending on your financial circumstances, you can make additional principal payments to shorten the loan term.
If you only plan on being in the house for the next three to seven years, consider a hybrid adjustable-rate mortgage like a 5/1 or 7/1 ARM. Bankrate’s ARM or fixed-rate calculator will help you compare the cost of a hybrid home mortgage to a fixed-rate mortgage.
To ask a question of Dr. Don, go to the “Ask the Experts” page, and select one of these topics: “Financing a home,” “Saving & Investing” or “Money.” Read more Dr. Don columns for additional personal finance advice.