Mortgage Options After a Divorce
One question that comes up frequently in family law for people who have decided to get a divorce is what happens to the house when both spouses are on the mortgage? How does the divorce affect the mortgage? A divorce will not supersede your mortgage. If you are asking yourself these questions, you should speak with a divorce lawyer. Mt. Juliet TN Divorce Lawyer Donna Wagner will present you with several options as to how a mortgage can be handled in a divorce. The following are some of the most common mortgage options in a divorce:
Selling the Home
One of the easiest solutions for dealing with a mortgage in the event of a divorce is to sell your home. This option is attractive because the profit from the sale can be split between you and your former spouse.
Decide Whether One Spouse Can Take Over House Payments
If one spouse intends to keep the house, they have the option of refinancing the house in their name only. In order to do this, that spouse would first need to qualify for a refinance based on their income. This can be difficult for some spouses facing a divorce. If for some reason, the spouse who wants to keep the home can’t qualify to refinance the mortgage in their name only, then perhaps it would be best to sell the house. Simply leaving your name on the mortgage and trusting that your ex-spouse will make the payments leaves you at risk of being held responsible for the mortgage costs by the lender in the event your ex-spouse doesn’t make the payments as required.
A Quitclaim Deed
This is a legal way of transferring ownership interest in property to another individual. When one spouse signs a quitclaim deed, they are relinquishing all of their rights to the property. It is important that you not execute a quitclaim deed transferring your rights to the property before your name has been taken off of the mortgage. If you are still on the mortgage when you sign a quitclaim deed, you are still liable for the debt associated with the property despite not having any ownership interest in the property or any right to profits from the sale of the property.
When You Cannot Afford to Sell the House
There are some circumstances when selling the home is not a viable option. For instance, if the loan and the debt associated with the house is greater than the value of the house itself, selling the home would not be a valid solution. In such circumstances, the following options are available:
Short Sell the House
A short sale is a sale where the mortgage lender agrees to buy the house for less than its real value and cancel your debt. A short sale has a negative effect on your credit score and could create a tax obligations since IRS considers the cancelled debt as income.
Rent the House
You and your former spouse can agree to rent the home until you gather enough equity. Renting eliminates the need for a short sale and gives you time to review other options.
If you are wondering how divorce affects your mortgage, talk to Mt Juliet TN Divorce Lawyer for an in depth understanding of the relationship between your divorce and mortgage. Some of the options include selling, leaving payments to one spouse, a quitclaim deed, short selling, and renting.
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I know for certain that If I am needing an attorney again in the future, I will be using Donna Wagner. There are so many great things to say about Donna. However, I believe what I appreciated most was how Donna handles special situations, and I assure you, my circumstances were just that! Donna was very thorough during my entire case. She was able to address my unique case but also do so with legal basis even though the courts may not always allow for such situations. Donna was very thorough each step of the way and was certain to not leave any stone un-turned. One thing I really liked about Donna was her fire. When situations arose, she can be more than passionate about her job and serving justice to those who deserve it. I also want Donna’s clients to know that she was very timely with me in her communications with me. Whether by email or phone, she was always just a call or a message away. When being in a legal situation, I know from previous experience, being able to reach your attorney means everything. I am more than pleased with the results that I recieved from Donna Wagner, and I assure you my case turned out better than I had imagined and even for a fair price. Donna Wagner rocks!
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