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Mortgage refi in second marriage

By Terry Savage on February 15, 2016 | Financial Planning / Retirement

I remarried 6 years ago and I myself invested in a condo in Florida which I bought for $165 K at an interest rate of 4.88%. I do rent it out as a second home. My name is not on the title of the house that I live with my husband in IL.
What factors should I look at if I’m looking to refinance? I’m not looking to sell it for at least 5 years and it has doubled in value. I’m just trying to figure out the pros/cons. I do have a daughter that will be starting college in 2 years and will help her as much as I can. Trying to figure out up front costs as well.

Terry Says:Ok, it seems that you need to do a bit of planning.  First, the property in Florida will not be considered a residence (primary or secondary) since you rent it out.  It is considered an “investment property.”  That means you might not get as low a rate on a refi.  And you’ll need to refi in Florida.   And you will need to qualify in terms of income.  I suggest going to www.GuaranteedRate.com to get an idea of what rate you could get on a refi.   By all means, you want to lower the monthly cost if possible.

But there are a few other things you might want to consider.  You’ve been married six years now, and it looks like things will work out!  So you might want to do some financial planning. For example, if your daughter lives in your household, your entire household income could impact her ability to qualify for financial aid.  That’s because if you are the custodial parent the income of the step parent is also considered in the aid formula!

Here’s an excerpt from Finaid.org:

My parents are divorced, and the parent I’m living with has remarried. Does my stepparent have to report his or her income and assets on the FAFSA?

Yes, provided that the parent you’re living with is the one filling out the FAFSA (your custodial parent). If your stepparent is married to them at the time you fill out the FAFSA, they must report their income and assets even if they weren’t married to them in the previous year.

The specific statutory citation that supports this is 20 USC 1087oo(f)(3), which is section 475(f)(3) of the Higher Education Act of 1965:

So it’s time to do some planning because your lives are joined even if you try to keep things separate!   You need an estate plan, a tax plan, and a financial plan.  You need a certified financial planner!



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