Understanding Your Mortgage SITUATION
A divorce can affect you emotionally and financially. We are here to help you maintain your good credit, secure your future homeownership eligibility, and preserve your options for moving forward. Regardless whether you choose to rent or buy a new home or even stay in the home you have, your credit needs to be in good condition. There are many options that our Divorce Lending Specialists can introduce to you for buying a new home or even keeping the home you have now.
Because divorces are anything but simple, having a joint mortgage loan can complicate the process, especially when one spouse wants to remain in the property. There are time-tested mortgage options for divorcing couples that may help both parties and make separating the home equity easier. These depend on factors such as the amount of equity in the home, how it was purchased and titled, and whether one person wants to keep the home.
If you are going through a divorce, mortgage issues must be addressed BEFORE your divorce is final. There are certain requirements and time frames before certain income is counted for you to be able to qualify for a loan or refinance (ie.; child support, alimony, rent). Contact one of our Divorce Lending Specialists.
Even if your divorce decree states one spouse will be responsible for the mortgage, you need to realize that this won't remove your liability in the eyes of the lender. When the two of you signed the original mortgage papers, you both agreed to be jointly responsible for repaying the loan.
To remove this liability, the house will need to be sold or the mortgage will need to be refinanced to protect the spouse leaving the home. You can also choose to maintain the mortgage the way it is, but this is a risky proposition.
Another reason to remove the liability of the mortgage is that the spouse remaining in the home may incur repairs (roof, foundation, HVAC, plumbing, etc) that they don't have the money to fix. Or they may miss mortgage payments and cause a foreclosure, not only losing your equity but ruining your credit.
YOUR MORTGAGE OPTIONS
One popular method in Texas that can be beneficial to both parties to separate the home’s equity and remove one party from the mortgage loan is an Owelty Lien.
A Reverse Mortgage loan can also be a great tool for divorcing couples to pull out some equity to pay off the leaving spouse. Or if either party can’t qualify or a traditional loan to buy another home that is similar a Reverse To Purchase Mortgage can be used. A Reverse Mortgage allows both parties to keep the lifestyle they’ve become accustomed to and alleviates fighting over the family home.
Regardless of the complexity, almost any situation can be remedied depending on your goals. Below are a few other options to consider:
In Geni’s book, ‘Surviving Divorce - Your Home and Your Money’ she goes into detail about:
Credit management and repair
Flex and bridge loans
Hiring the right Certified Divorce Lending Professional
Income vs qualifying income
Rules regarding marital lien
Contingent liability vs mortgage financing
Sell Fast For Cash
Buy Before You Sell
This book will help you put all the pieces of the divorce puzzle together while also explaining how to price your home for sale, how to market it, and how to negotiate for the best price and terms.
Contact Us Today
To talk about your situation and your options whether selling the home or doing a buy-out with your spouse. Even before the divorce proceedings begin, we can evaluate your financial situation to help you retain a large percentage of your estate or advise you on your new purchase. Call Geni Manning at 469-556-1185 or fill out our Online Request Form.