The first step in assuming a mortgage after a divorce is reaching a legal agreement between both parties. This agreement must outline that one spouse will assume the mortgage and take full responsibility for future payments.
Whatever the reason, today's truth is that women, not men, take the financial hit in divorce -- and it takes years to recover. Multiple studies conducted over the last 10 years all demonstrate that a woman's income drops significantly after divorce, while a man's stays the same or increases.
No, you cannot remove someone from the mortgage without refinancing.
Divorcing couples with a joint mortgage typically sell the home, refinance the mortgage in one spouse's name or have one party buy out the other. Your divorce agreement should cover all possible scenarios to protect both parties from financial harm.
Legal Remedies When Refinancing Isn't Feasible
If the spouse who wishes to keep the home cannot successfully refinance it after the divorce, several legal remedies and options may come into play: Sell the Home: One option is to sell the marital home and divide the proceeds as agreed upon in the divorce settlement.
Obtain lender approval
If your lender wants to, they have the power to remove someone's name from the mortgage without needing to refinance.
Yes, removing a name from a mortgage typically incurs costs. Refinancing usually requires closing costs of 2-5% of the loan balance, while a loan assumption may cost around 1% plus processing fees. Loan modification costs vary by lender.
If you're keeping the home and you don't have enough cash to buy out your ex-spouse's share, you'll need to use the home's equity for a “divorce and mortgage” buyout agreement. A home equity loan or HELOC could access your equity without refinancing the first mortgage.
You can take over someone else's mortgage using an assumable mortgage. Assumable mortgages are a great way to get into a home if you're looking to buy or sell, or even just do some property flipping.
Because California is a community property state, if the couple bought the house while they were married, they both have an ownership stake in it, and neither can compel the other to leave.
It's essential to realistically assess whether you can comfortably afford the home on your own. This includes mortgage payments, property taxes, and ongoing maintenance costs. Additionally, if you wish to retain the home, be aware you may need to refinance the mortgage to remove the other spouse's name.
As long as your name is still on the mortgage, you are equally responsible for the payments. The credit companies and your lender don't care of your divorce decree says. That's why you need to make sure to get your name off the mortgage of any properties your spouse is taking over after the divorce.
Yes, you can refuse an appraisal in a divorce. This is especially true if you think it is inaccurate or unfair. But, refusing the appraisal amount may lead to more talks. These could be negotiation, mediation, or even a lawsuit to resolve the disagreement.
Most men experience a 10–40% drop in their standard of living. Child support and other divorce-related payments, a separate home or apartment, and the possible loss of an ex-wife's income add up. Generally, Men who provide less than 80% of a family's income before the divorce suffer the most.
There are two ways to remove a divorced partner from a mortgage: obtaining a release of liability from the lender or refinancing the mortgage. A release from liability is easier, but counts on the lender granting permission.
Joint mortgage responsibility
If both spouses' names are on the mortgage, then both must keep paying, even if one leaves. Whether the spouse lives in the home or not, they remain financially tied to the mortgage until they pay it in full or it gets legally modified.
Unless you're assuming a mortgage privately from someone you already have a close relationship with, you'll likely go through underwriting to transfer financial responsibility. The seller's lender will put you through an approval process that requires documentation and information typical of a mortgage application.
You can take legal action against them for breaching the agreement you both made or seek a court order to force the sale of the property. It's important to consult with a lawyer to understand your legal rights and options and to make the best decisions for your situation.
You'll typically only be able to transfer your mortgage if your mortgage is assumable, and most conventional loans aren't. Some exceptions, such as the death of a borrower, may allow for the assumption of a conventional loan. If you don't have an assumable mortgage, refinancing may be a possible option to pursue.
How Long Do You Have to Refinance After Divorce? There is no limit on the timeframe for refinancing after divorce. In fact, some couples choose not to refinance after divorce at all, and other couples are unable to refinance immediately after a divorce because they don't qualify for a refinance.