Divorce may require reconsidering an existing mortgage loan if you intend on taking sole ownership of shared property. Depending on your current income and credit score, you may qualify to refinance a mortgage under your name.
As noted by Mortgage Professional America, if you could afford the payments on your own, you may remove your ex-spouse from the title. This could allow you to take ownership of the property and release your ex-spouse from an obligation to make payments.
How may the home’s equity divide in a divorce?
A new mortgage loan may require a down payment, especially if you have a less than stellar credit score. Your property’s equity value may provide cash to refinance and cover fees and closing costs. Your ex-spouse, however, may have a legal right to receive his or her fair share of the home’s equity.
Indiana’s equitable distribution law requires couples to divide their shared property fairly in a divorce. Fair, however, may not result in an even division. You may buy out your spouse’s fair share of property by trading its equity value for other shared assets that your spouse may wish to own.
How may a house sale affect property division?
If you and your spouse decide to sell your home, the proceeds generally pay off the balance of a mortgage and cover a realtor’s fee. You may then split the remaining funds fairly.
Property division could become complicated; you and your spouse may require several discussions to negotiate ownership of a home. If you could afford a mortgage, you may have an option to refinance the home on your own and use its equity to pay your ex-spouse his or her fair share.
