One of the most challenging and complicated aspects of a divorce to navigate is what happens to your home afterwards.
If only one party was on the mortgage and is listed as the home’s sole owner, then that person gets to keep the home, unless a court orders that it be split or transferred as part of a division of assets.
But what if both people own the home and are listed on the mortgage? What happens to the home then? There are a couple of possibilities.
- One party buys out the other: If one person wishes to stay in the house and take over the entire mortgage, they can buy out their ex. Sometimes this is not possible, because neither party can afford to buy out the other. A lender may also not want to approve it if the party trying to take over has not been earning sufficient income.
- One party gives up their equity: In theory, one person may simply choose to walk away from their equity in the home, in exchange for something else they want during the divorce negotiations.
- The house is sold: Both parties can sell the house, either soon or later down the line and split the equity after the sale.
Let’s say that one party does wish to remain in the home, buying out the other and taking over the mortgage. How do you remove the other party from the mortgage?
The answer is to apply for a refinance. The lender will consider the credit score, debt-to-income ratio, income, and assets of the party that is taking over and determine whether they can afford the home on their own. If they can, the lender can approve the refinance, removing the former spouse from the home loan.
Along with removing your ex’s name from the mortgage, you will also need to transfer the home’s title. Along with your lender, a lawyer will be indispensible to completing this process successfully.
We Can Help You Refinance After a Divorce
Going through a divorce can be a challenging time, both logistically and emotionally, particularly with respect to the family home. Island Coast Mortgage can walk you quickly and smoothly through the divorce refinancing process in Florida so you can move forward with your life. To schedule your consultation, please give us a call at 239-214-7011.
