Mortgages And Divorce - What You Need To Know
People going through the divorce process need to know that until the final paperwork is signed
, there can be many restrictions that will affect their lives. One area that will be affected is their ability to buy property or refinance an existing mortgage.
Finance is one of the major areas of consideration when a divorce process begins, and property division is often at the core of this concern. If the couple owns a home together, the obvious concern is who will maintain ownership. In this market, selling the property and dividing profit can take many years and become a source of frustration.
Frequently ownership of the property will go to the spouse that is best able to maintain the existing payments. Obviously the inability to maintain payments after the separation will lead to foreclosure, as well as destruction of credit. However, when there is both property and children to consider, the courts may decide that the custodial parent should keep the home, regardless of income, to minimize the disruption to a child's sense of security and well being. The spouse with the higher income may be required to continue making house payments, or pay more spousal and child support.
While many couples want and prefer to make all decisions regarding division of property themselves, this is a case where what you don't know can hurt you. For instance, did you know that once you have signed for a mortgage, your name cannot be removed from the loan until it is refinanced or paid off? If you vacate the property, but are still liable on the loan, you can be held responsible for the payments, should your ex go into default.
Independent legal advice is always a good idea when there is real property involved in the dissolution of a marriage. While there are costs involved in hiring an attorney, this is a time when it is important to protect yourself. Divorce laws, while already complicated, are also state specific. An attorney will know what laws apply to your state and your specific situation.
It is not uncommon for one spouse to be required to buy out the other spouse's financial interest in the property.
Decisions regarding qualifying for a new mortgage or a refinance of an existing mortgage can involve one or more of the following:
1. A review of monthly debt obligations, including spousal and child support.
2. Proof of all sources of income, including child and spousal support.
3. Proof that the child support will continue for a minimum of 3 years could be required in the form of birth certificates for children.
4. The divorce settlement may require a division of all assets, including savings and pension benefits. This could affect the ability to get a loan because some loans require reserves or cash on hand. Depending on the value of the savings and assets, dividing the funds could lead to disqualification of a mortgage application.
5. Lenders will not approve a mortgage while a divorce is in process. While both parties may have agreed to terms regarding children, financial issues and property division, the terms are never final until a judge has signed off and a final decree has been issued by the courts.
6. The final decree for the divorce may stipulate that the property must be sold. Most lenders will be unwilling to approve a mortgage on a property that must be sold or that has been recently listed for sale.
Divorces are very complicated and usually unpleasant at best. It is always in your best interest to at least consult with an attorney so you have a better understanding of the laws of your state. You may be pleasantly surprised to find that a non-contested divorce, even when property is involved, is less costly than trying to undo the mistakes you might make when trying to go it alone and unadvised by legal counsel.
Reproduction permitted only when all active hyperlinks are included. 2010 All rights reserved.
by: Stephen Daniels
Unsecured Loans CCJ - Avail funds without risking your assets Variable Rate Mortgages: Ten Things You Need To Know Pros and Cons of Fixed Rate Mortgages Advance Payday Loans - Get Finance in a Prudent Way Loan Advance without Teletrack – Get Funds Right Away With Loan Long Term Loans Canada: Great for the Potential Borrowers Instant Unsecured Loans – Solve Urgent Crisis on Time with No Risk Create A Clickbank Atm Machine short term payday loans – need oriented loans Loans for people on DSS benefits: Good means to handle emergency Instant Approval Loans - Quick Decision Funds For Daily Tasks Urgent loans: Deal with immediate fiscal requirements Secured Loans – Safest Way Out Of Your Troubles
