What is going to happen with construction loan and house?

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Just finished building a house with husband with construction loan,made final draw and now its time to resign papers to permanent mortgage. Found out he was cheating and I refuse to sign on permanent mortgage. He cant find any one to cosign for him and he cant get the permanent mortgage on his own. He has filed for divorce and I am scared that I will have to pay half of the construction loan or does it belong to the bank? I don’t have an attorney but am getting one ASAP so I can find out more. Arkansas resident here, have looked at the laws but I just need to know.

2 Comments
  1. Reply
    paul
    February 9, 2011 at 11:29 am

    Disposition of the house will be decided in the divorce. Yes you are both liable for the payment on the house, if neither want it you would likely sell the house and pay off the loan. It you could not sell it for what it cost to build (the construction loan) you would both be liable and the division would also be decided the the divorce. With no children the court could divide debts equally or based on individual income or cause of divorce.

  2. Reply
    Jerrold J
    February 9, 2011 at 11:39 am

    READ the CONTRACT for the Construction Loan and THAT will spell out what happens if you fail to refi. Talk to a Realtor in your area and have them do a CMA on the property to see what it is worth, what it will appare for, and what it might sell for in this market. The house is an asset of the marraige and should be worth more money then what is owed against it. If you refuse to sign new loan docs then the bank MAY take it back and give you nothing so is your goal to COST yourself AND your soon to be Ex money or do you WANT to get half of the value of the property? Best guess is that you SHOULD sign loan docs THEN either sell for a profit to split OR one of you keeps the house and buys out the other. GIViNG the house to the construction loan company to hurt your spouse also would hurt you and YOUR credit rating.

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