Cutting a house in half sounds like a ludicrous idea but if you are going through the process of divorce you just may feel like this would be the easiest way to move forward. Divorce has enough stress surrounding it that even the thought of having to deal with the nuances of adjusting the mortgage arrangement could force one to put it off several months or even years. By doing this, you may end up having more heart ache and problems in the long run.
If you both own a home together and are going through a divorce, it is advisable to seek assistance from your mortgage banker. One notable item is that even if your divorce decree states one spouse will be responsible for the mortgage, this doesn’t exclude the other spouse from responsibility in the eyes of the lender. Because both spouses signed the original mortgage documents, the understanding is that both are jointly responsible for repaying the loan. So, if one spouse is taking over the ownership of the home and thereby is responsible for the mortgage then the mortgage agreement should reflect that change. Typically, the spouse who wants the house will buy out the other spouse’s equity share. From there the mortgage is refinanced into his or her own name only. This keeps the other party from being liable for mortgage payments in the future. Additionally, the spouse who was bought out will sign a quit claim deed relinquishing his rights to the house. *
If you would like some more information about what options are available as well as access to the correct paper work, look no further than your local Stockton Mortgage Office. Give us a call today 1-888-914-2276 or find a loan officer near you.
*This is intended to provide general information only and does not or is not intended to constitute legal advice. Please consult your attorney.