Leaving Your Spouse and Your Mortgage Behind
“Traditionally, the marital home was the most valuable asset to be divided during a divorce. Since the recession “wiped out the equity in many homes, couples now fight over whether to leave the property. Learn more about how to divorce your spouse, and your mortgage. “
Traditionally, the marital home was the most valuable asset to be divided during a divorce. Couples would fight about who got to keep the home, or how much each party would leave with after the property was sold. The real estate crisis of 2008 left many couples upside down in their mortgages (having negative equity). Because of that, divorcees now fight about who will be left to pay off the debt.
Some people believe a short sale would be appropriate. They don’t care to pay for a home they no longer live in, and they want to leave a bad investment behind. Others believe a short sale would be akin to foreclosure, so they try to keep the house to preserve favorable credit ratings. By refinancing the property, the party keeping the house will continue to pay the mortgage, and the party leaving the house will sever their ties to the property.
Because of the current financial climate, refinancing is not so easy. The value of the home (or the lack of equity) may present too difficult a risk to justify a new mortgage. Also, the person trying to refinance may not have the proper income, or credit blemishes may present too much risk for a bank to issue another mortgage.
When these issues arise, divorcing parties may benefit from the new version of the federal government’s Home Affordable Refinance Program (also known as HARP 2). This program allows homeowners to refinance even if they are upside down in their mortgage. Couples may also agree on a waiting period where spousal maintenance or child support payments can be documented as income for refinancing purposes.
Ultimately, an experienced family law attorney, along with other financial professionals, can provide you with the resources you need to make sound business decisions regarding your home.
Article provided by Anthony C. Starks Law Office
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