Divorce is a very stressful and emotional life event. Divorce agreements get even more complicated if there is an existing mortgage on your home. Selling your home is the best option; however, it all depends on your divorce decree. You may Quit Claim deed yourself off the title, which restricts you of having any further rights to sell or keep the property, even though there is an existing joint mortgage. If there is an existing joint mortgage, make sure you refinance yourself off the mortgage if you are off the deed of the property. Do not finalize your divorce if you only Quit Claimed yourself off the property, it is necessary to remove yourself off the mortgage as well. If you are still on an existing mortgage, you are liable for the debt. Keeping yourself on an existing mortgage with an ex-spouse is negative impact to you because:
Liability
You are still liable for the mortgage if you do not refinance yourself off the mortgage or sell the property. In some cases, ex-spouses go back to court to enforce their ex to get refinanced or sell the home in order for you to be fully removed off the mortgage liability. Keep in mind, you are placing your credit at risk if your ex-spouse is making the mortgage payments, she or he may not be able to make the mortgage payments in the future which will affect your credit scores since you are joint on the mortgage.
Debt to Income
The monthly mortgage payment will be included in your debt to income ratio when you are purchasing a new home, a new car, a new business or your debt service ratio when you are refinancing your business. To offset that debt, you will need copies of 12 months of cancelled checks from your ex-spouse, in some cases there is no cooperation to give the ex-spouse cancelled mortgage checks to be qualified for a loan. If the ex-spouse refuses to provide copies of cancelled checks for the joint mortgage, you do have the option to go to court. For example: A client had been trying to purchase a home for the past five years, he could not since his ex-spouse kept refusing to forward the copies of the cancelled mortgage checks. My client finally decided it was time to try again to purchase a home; he contacted us to assist him in obtaining the copies of the mortgage payments since it was affecting his credit scores and had an active mortgage application. His credit scores were affected because the mortgage representative pulled a new hard credit inquiry each month on his credit, which dropped his scores down and resulted in a higher interest rate. After our conversations with the ex-spouse and her current husband, the cancelled checks were finally released to my customer. Our turn time in obtaining the copies of the cancelled checks was four business days. Eventually, this client will go back to court and file a motion with his real estate attorney to be removed off the joint mortgage.
For more information on how we can help you with your credit during a divorce and after a divorce in Fort Myers, Bonita Springs, Naples FL and Marco Island, FL please fill out the online contact form about your concerns or give us a call at 855.477-9007. Read what our valued clients have to say about First Pro Capital and Credit Consulting Professionals on our Testimonials page.
Leave a Reply