| Thinking about a second mortgage before divorce? | | | | your divorce paperwork with the county's records |
| Here are some things you may want to know. | | | | office. This is due to the fact that once the divorce is |
| Mortgages and loans can be tricky and have many | | | | final; the paper work may have changed. |
| factors when going through divorce. Why do lenders | | | | In the beginning of the proceedings, the initial divorce |
| want to know the details of your divorce? Because | | | | papers write out the separation of property and child |
| everything can change after the divorce and these | | | | spousal support. This document is not binding. Any |
| changes determine when and how they collect on the | | | | decision made in these papers can be altered before |
| loans and mortgages. | | | | the divorce is finalized by both spouses and/or by a |
| The details listed below are items lenders want to | | | | judge. The lender requires the final decree then signed |
| know: | | | | by the judge to validate information on the original loan |
| 1. Alimony and child support: One spouse may be | | | | application. |
| paying alimony or child support. This can affect | | | | Now if both spouses are on the property loan, but one |
| monthly debts for the spouse paying and may | | | | will keep the property after the divorce is final, then the |
| determine how much they can afford to pay on the | | | | person leaving the property would sign a quit claim |
| loan. | | | | releasing any ownership interest. |
| 2. Division of Assets: Most divorce settlements require | | | | If the loan is not refinanced under the single owner's |
| a division of assets such as a savings account. If a | | | | name, then the ex-spouse is still on the loan and can |
| lender requires reserves or available cash funds to | | | | still be liable for payments- even if they have no |
| apply for the loan, this may actually affect qualifying | | | | ownership interest. The debt will still be on the spouses' |
| for a loan. | | | | credit reports and may possibly be a determination |
| 3. The final divorce decree: This may require that the | | | | when going to buy a new home and applying for a |
| property be sold as a part of the division of assets. | | | | new loan. |
| Lenders do not want to lend money to properties that | | | | If the spouse who still owns the old home defaults on |
| will soon go on the market after the divorce because | | | | the loan, the other is still responsible for payments and |
| they do not make money on the property until several | | | | must take precautionary measures because this |
| months after the loan closes. Divorces can cause the | | | | affects their credit too. |
| spouse to buy out the property from the other spouse | | | | If the ex-spouses name is removed from the title it |
| in the separation of assets. Did you have to purchase | | | | cannot be removed from the mortgage loan papers. |
| the home from your ex-spouse? Once you have filed | | | | Lenders do not allow anyone to be removed from a |
| for divorce and the papers are already in process, this | | | | loan to protect their investment. Anyone can be added |
| does not stop you from getting a loan, but many | | | | to a loan. |
| factors might come into play as the divorce papers | | | | To purchase a new home after the divorce [ the |
| might be drastically altered after the divorce | | | | ex-spouse will have to prove and document they |
| proceedings. This can then change the terms of the | | | | make enough income to qualify not only for new loan |
| loan. | | | | but be able to pay the mortgage on the old home as |
| If you need to refinance on your mortgage, but | | | | well. |
| paperwork has not been filled out and you need to | | | | All this can affect your credit and qualifying for new |
| refinance to get the cash to buy out the other spouse, | | | | loans. |
| you'll want to apply and close you loan before you file | | | | |