Today’s blog is going to focus on some of the impact that divorce can have on your mortgage, divorces are just as prevalent here in the Santa Maria real estate market as they are anywhere else in the U.S. sorry to say. But it is reality of life or at least a reality of our society and for those that have a home and a mortgage on that home it can create some inconveniences that are not very fun for both parties.
A Final Divorce Decree is required prior to closing a loan for the following reason (s):
What if both parties are on the loan, but one spouse will own the property after the divorce is final? What usually happens is that the person leaving the property signs a “quit claim” or “warrant deed”, giving up any ownership interest in the property. However, if the loan is not refinanced in the single owners’ name alone, technically the spouse, who no longer has any ownership interest in the property, is still named on the loan, and is still liable for the payments. The debt will continue to show on the credit report, and the payments will be included in figuring the eligibility to buy another home. Now this can be some real heartache here so let me make sure you get this part ITS VERY IMPORTANT. YOU CAN QUIT CLAIM YOUR PROPERTY …..YOU DO NOT HAVE A HOUSE. But your credit report shows that you still do and that WILL can count against you ….moving on with your life to buy again. Now after some time has been established and your former spouse can demonstrate their ability to pay the mortgage without you, the can apply to refinance it all under their name and it is possible to start your life new again.
Now what if the spouse with title to the property defaults on the loan, and the other spouse is still on the loan? That person has three options:
) Pay all back payments, taxes that are due and file a notice of default against their prior spouse. ) Allow the lender to foreclose and take the house back. This will damage the credit, but might be the only real option. ) File for bankruptcy, with the house being the only credit listed. Again, this will hurt the credit score, but it’s a better option than allowing a foreclosure to be reported against you.
Please note that a person cannot get their name removed from the mortgage even if they are removed from the title. While lenders often allow a borrower to be added to a mortgage, they do not allow borrowers to be removed. Lenders have made a large investment in your home, and will enforce any legal method to protect their investment. Even where I live and work here in Santa Maria Ca. divorce can be just as ugly but as professionals, what to look for when our clients, need our help when they may happen to be in this situation, and want to buy a home.
Lastly, what if a person wants to purchase a new home, but is still on the mortgage of the house they no longer own? The amount of the monthly payments, including taxes and insurance, and any other recurring monthly costs associated with the house such as Home Owner Association Fees, will be added in your monthly financial obligations. The applicant will have to show enough income to qualify for the new mortgage and the old mortgage, including all other outstanding debt. Do not count on lenders allowing someone to offset the amount of the payment on the old house, with evidence that they are no longer liable for it. In today’s market, lenders are protecting themselves whichever way possible. This should apply for homeowner’s and prospective homeowner’s as well. The best advice I got is be patient if you are newly single, this too shall pass, divorces are very difficult.
I hope this was useful and if you could please comment if so and any ideas or questions that you may have so I can provide good information thank you.
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If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans. So please contact me by sending me an email at: GenePerez@GMSLoans.net
I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.
my goal is to provide you with resources you need. I can also help in getting the financing for your home. If you have any suggestions or questions in how I can provide more or better
information please let me know. I have been helping my clients for the last 15 years on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588, NMLS 289430
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Gene Perez is Licensed Real Estate Broker and a mortgage broker for Greater Mortgage Solutions.
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Tags: buy a home in California, central coast homes, divorce and mortgages, financing for home, Gene Perez, Santa maria homes for sale
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