What will happen to your home as you divorce? The marital home can be one of the biggest assets in a marriage and also the hardest to divide.
If you want to keep the home can you “buy out” your spouse? Can you refinance the mortgage on your own? Will you have to sell your home when you get divorced?
Next Act Properties can help you make the right decisions and determine if you can afford to stay in your home or if it is best that the home be sold. Most importantly, we also work with your divorce attorney to ensure that the legal divorce agreements have the correct language so your interests are best protected. If the home has to be sold we have a network of agents who specialize in divorce who can help you through the sale process and then help you find a new place to live.
Divorcing? Deciding what to do with your marital home?
Typically there are three options couples consider when deciding what should happen with their home. These include, joint ownership, selling the home, or one spouse may want to keep it. Which option works for you depends upon a variety of interwoven factors including your other financial assets, income, and even credit score.
Keeping the home and continually to jointly own the property is rarely a good option. After all, you are divorcing for many reasons and a clean split is often the best course of action.
Selling the home and splitting the equity comes with decisions to make jointly such as the selection of the realtor, asking price, and then final closing issues.
Many times one spouse decides to keep the home and buys out the other’s share of the equity during negotiation with other assets. This can work as long as the spouse keeping the home has the financial ability to refinance the mortgage and afford upkeep going forward.
Our team at Next Act Properties is ready to help. We specialize in helping divorcing people work through the details of their real estate and mortgage issues. We not only can assist you and your divorce attorney in planning, but we can also help you refinance or, if necessary, sell your home.
Keep & Refinance Your Home When Divorcing
Can you keep your home and refinance your mortgage when getting a divorce?
If you are going through a divorce, your attorney has probably mentioned the “marital home” and your various options of what to do with it.
What is required if you want to keep your home as you divorce?
There are three big considerations to keeping your home:
1) How much equity do you have in the home that will need to be divided in your divorce and do you have other assets to “buy out” your spouse’s share of that equity?
2) Will you be able to refinance the mortgage in just your name? To refinance you will need to have a good credit score as well as sufficient income from a job, alimony, and/or child support.
3) Lastly, and perhaps most importantly, we want to make sure you can afford to not only buy out your spouse’s share of the equity, refinance the mortgage and make the monthly mortgage payments, real estate taxes, home owner’s insurance, etc. but also be able to properly maintain the property.
We don’t want you to be home rich, but cash poor!
We will work closely with you to ensure that your financial situation, divorce agreements, and future budget will all be working together should you decide to keep your home.
If you have questions and/or are ready to get started today we are here to help you.
Alimony & Child Support Payments
Can I use alimony and child support payments to qualify for a mortgage or refinancing? This video explains that, in general, you’ll need to have an official separation agreement or final divorce decree spelling out each payment amount and its duration. Each of those payments will need to have been received for, at least, the previous 6 months and they will need to continue for, at least, the next 36 months from the date of the closing. The lender will want to see all legal documents such as your formal separation agreement or final divorce decree.
For child support to qualify, you will have to supply official copies of each child’s birth certificate to prove they will not reach the age of 18 or 21 (depending on the state) for the next three years (36 months).
It is critical to work with a divorce attorney and a mortgage broker who specializes in divorce and who understands the details of your financial picture and can help you structure the right payment plans and have the proper language incorporated into your Divorce Settlement Agreement so you can qualify for your mortgage. Having a divorce mortgage expert, like Next Act Properties, early in the process will avoid confusion and future issues.
What is a divorce mortgage expert?
A divorce mortgage expert is a mortgage broker who has educational training and experience working with divorcing and divorced people.
There are over three hundred thousand mortgage brokers and bank loan officers in the US, but only a very small percentage, less than 5%, have that training and experience working with divorcing and divorced people.
When dealing with your marital home – one of your largest, if not your largest, asset – you want to work with a specialist who deals with divorce mortgage situations everyday, not a generalist who may work occasionally with someone divorced or divorcing.
How Can You Keep Your Home After Divorce?
If you really want to stay in your home after divorce, it’s possible!
Let us guide you through the entire process: From a financial assessment to refinancing the mortgage in your own name, we have vetted divorce mortgage experts nationwide who understand the nuances and intricacies of divorce.
Can Alimony and Child Support be Used as Income to Qualify for a Refinancing or New Mortgage?
The short answer is, yes, alimony and child support can be used as income to qualify for a refinancing or new mortgage, but certain rules must be followed.
Watch to learn which primary conditions must be met in order for your alimony and/or child support checks to qualify as income on your mortgage application.
How Can You Buy Out Your Spouse’s Share of the Home’s Equity?
The first step would be to see if the spouse who wants to keep the home can afford to buy-out the other spouse’s share of the equity in the home and then to refinance the mortgage so that the new mortgage is only in the name of the spouse who will remain in the home.
We can work with you to see if there are sufficient assets for one spouse to buy-out the interest in the home from the other spouse.