Mortgage Myth: Sticky subject….divorce

When you go through a divorce the party that is forced to move out and find another house is going to have a difficult time qualifying for a mortgage until the other party refinances the marital property.

This is NOT true. We help divorcees qualify for new mortgages all the time!! Here is the deal…when you are going through a divorce and preparing and agreeing to the terms of the separation, PLEASE be sure that the assignment of debts is completed. This would include the mortgage debt. The person being left in possession of the house should also be the one responsible for the mortgage payment and real estate related debts such as the homeowners association dues, insurance and property taxes. We can help the other party qualify for a new mortgage without having to have a refinance completed. They can remain on the mortgage but they typically are removed from the title via a Quit Claim Deed.

The only caveat here is that IF the party responsible for the martial house payment fails to make the payment, then the other party’s credit WILL BE AFFECTED! That being said, a refinance is still very important, simply not crucial, to the ability to purchase a new home in the short term.

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