You should know that getting a mortgage after divorce is not impossible!
Tips for Acquiring Mortgage Finance During, After and Before Divorce
It’s tough to deal with a broken marriage. However, the financial repercussions and implications of divorce are much more difficult to handle. So, if your sweet relationship has come to a sour end then perhaps the easiest way out is to sell the property at a desired price and divide the money between each other. However, property matters are not as simple as they seem and you may have to deal with several issues such as opt for mandatory refinancing options, continue the obligation, deal with spousal buyouts, face tax consequences and finally deal with the financial legacy of the past obligation. Here, find some tips for acquiring a mortgage finance after divorce and also get suitable mortgage financing advice that may prove helpful to you during, after and before a divorce.
Acquiring a mortgage after a divorce is not that difficult. As a borrower you must provide the mortgage finance company with an accurate picture of your existing situation. You must fill up the loan application form honestly so that the lender gets an opportunity to assess you divorce decree and find out if you have any other financial obligations like supporting the child, alimony/support from the spouse received or to be paid and then provide you finance accordingly.
Thus, when you get income as part of alimony or supporting the child, then you can use the income to acquire a fresh mortgage. However, for this you need to produce an alimony agreement that states that you will continue to receive the money for the next 3 years in addition to a six months statement that shows that you have been receiving the money. On the other hand, if you pay the child support and alimony, then you will be able to borrow a much lesser amount as debts only result in reduction of income.
In case you are co-owners of the house and the property is on mortgage, you can still acquire a fresh mortgage. However, you will have to produce valid documents (bank statements) that clarify that the other party (your spouse) is making payments for that property. Also, if you and your ex spouse are paying the mortgage amounts from a joint bank account and your divorce decree hands over the property to your spouse, then both of you are equally responsible for paying the mortgage amount. In case your ex is interested in a buyout, then you will have to submit a final statement HUD with the mortgage company to acquire a fresh loan.
During and Before Divorce
In case you aren’t divorced yet, then make sure that you prepare a marriage settlement agreement before you eventually get divorced. This will help you obtain mortgage finance easily as you will have settled all the finance related matters in advance. What this essentially implies that you will have created separate bank account and will then continue to pay the requisite mortgage amount from separate bank accounts. It’s also advisable that you consult a mortgage representative and understand the financial implications of divorce in addition to understanding the complexities involved in the underwriting procedure during and before your divorce. You could also ask your ex-spouse to get the property refinanced so that you are under no obligation to pay the existing loan (applicable where you are co-owners of property). Also, close your joint accounts and ensure that your spouse is not listed as an authorized user with the bank. Additionally, do the calculations related to your income and settle all your credit disputes in advance.