If your rate is above 6% now, you need to do a FHA streamline to lowerthe rate to about 5%.If one or the other wants to stay in the house, you need to refinance into that person's name...providing they qualify on their own.If you sell the house..their will probably be a prepayment penalty or re-captureof part of the tax credit.Call if you want more information...314-744-7861

Hello Annette,The $8,000.00 Tax credit was applied to you for purchasing your primary residence, it is my understanding as long as either one you continues to occupy the property as a primary residence you are still entitled to that money. the divorce and change of ownership in the property is just making changes to who will be financial responsible for the loan and as long as either one you is responsible for the loan and is living at the property it is still consider an owner occupied property. i would also recommend you talking to a Certified Public Accountant who is more familiar with the IRS and Tax laws.

The tax credit question is best to be answered by a CPA. Depending on the terms of your impending divorce one of you may wish to buy the other party out of the house and in that case the person keeping the house should refinance to get thier mortgage in thier name only along with the title of the house. When speaking with your attorney in regards to property settlement agreement, you and the soon to be ex spouse should get an idea as to what the value of your house is. If the value has dropped you may have a hard time buying ther other person out. So you and your attorney may to stipulate that the the house gets refinanced or sold with 5 years. My advice is that you and the soon to be ex continue with paying the bills on time no matter how badly you want the divorce. Have seen it many times where they let the bills fall behind and then have a hard time getting credit in the future.