You do have options when it comes to your property.
Almost every time a couple gets divorced there are questions that arise surrounding the real estate they own in common. Unfortunately, a lot of divorcées do not know where to turn in order to get accurate, concise and honest answers about what to do during the divorce process and in the aftermath in concern of the real estate. Here are a few of the questions a divorcée might ask during the divorce process:
1. “I think I want to stay in the home……what do I need to keep in mind?”
First and foremost, you must consider the size of the home, utilities, payments, taxes, your personal needs, etc. Does it make sense to stay in the home? Remember, it can be a big “shock” to your budget to take on the house payment solely in your own name versus “splitting” the cost with a spouse.
2. “My spouse is entitled to share in the equity we have in our home……how is this handled?”
Remember, the term equity relates to the current “spread” between what the house is worth and what you owe TODAY. To accurately calculate this number, you need to retain the services of a licensed real estate appraiser. (call us if you need a recommendation or referral) As a rule of thumb, any money you or your spouse contributed to the home from your own pre-marital assets must be also be accounted for in determining the final division of equity.
3. “What if I am the one leaving the home?”
It is crucial that you fully understand that if you are on the note for the home, REGARDLESS, of what the attorneys, court commissioners or judge agree or rule on, you are still liable for the terms of that note and if the mortgage note is not paid as agreed your credit will be damaged. If the pay history were to get even worse, you could be subject to foreclosure proceedings and the liability that surrounds that. You may ask, “so how do I assure myself that my name/credit won’t be affected?”, quick and simple………the person staying MUST refinance solely in their own name. That being said, the best advice we can give is to start that process of refinancing DURING the divorce proceedings.
4. “How might divorce impact my credit?”
This answer can come from all angles and all shapes and sizes. That being said, please see one of my past blog posts:
5. “If I want to buy another home–am I going to be out of luck while I am still listed on the old mortgage?”
Not necessarily, but……….looking back at answer number 3……….your underwriting process will be a lot less clunky and your likelihood of qualifying for a new home will be much higher if your spouse has already began the paperwork surrounding their own individual refinance. Keep in mind, if the divorce decree clearly states the nature in which the “old” mortgage is to be handled, the current payments could be omitted from the underwriting process of your new loan. However, you are still gambling from a credit reporting standpoint.
For expert legal advice, please consult with an attorney. Fairway Mortgage is an equal opportunity lender offering free consultations and advice to people with thoughts of, in the process of or in the wake of a divorce where real estate is involved. When it comes to your home, let Fairway help you make the best decision for your financial future.
If you or any of your loved one have any questions regarding mortgage financing, home ownership or banking in general, please don’t hesitate to reach out.
Until next time-Yours Financially, Milly
Jamey Milheiser, NMLS #284184
Phone: 920-722-5626
With over twelve years of industry experience and a steadfast devotion to client service and professionalism, I am the branch manager at Fairway Branch 306. I pride myself on a continued representation of my clients in the mortgage market place to put them in the best financial standing possible. 
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