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What is the smart thing to do with a mortgage after divorce?

Our home is worth $800,000 and we have paid down $56,000. by veronica_n from Redondo Beach, California. May 2nd 2013 Reply


James Barath (JamesBarath)
#9 ranked lender in Indiana - 352 contributions

The smart thing to do is follow the judicial mandate outlined in the settlement agreement attached to your divorce decree. Once you have satisfied your legal requirements, speak with a financial adviser and mortgage planner to learn how to best leverage your residential asset.

May 2nd 2013
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Who ever was awarded the home should refinance it into their own name only (assuming you qualify). If he got the home in the divorce, but your both on the loan, then if he makes a late payment, it would reflect on your credit.. Anytime in the future when you apply for new credit, the late payments on your x spouses loan will reflect poorly, and could cause a denial. lenders issuing credit will not ignore the bad credit on your credit report, even if it was from your x.. the home should be sold or refinanced so the person living there is responsible... .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

May 3rd 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,636 contributions

MAKE SURE the person keeping the house refinances to remove the departing person from the loan obligation. The divorce only removes you from ownership of the house. You are still responsible for the loan. www.JoeMetzler.com

May 3rd 2013
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Meena Iskander (Miskander)
#0 ranked lender in California - 18 contributions

Hi Veronica, my office is out in Irvine..I will need more information are you trying to sell it, keep it or transfer your name into it? If you have time I'd like the oppurtunity to speak to you and see how I can help. Feel free to call me anytime at 201-673-7205.

May 2nd 2013
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Dave Metsker (DaveMetsker)
#36 ranked lender in Oregon - 2,318 contributions

Make sure all payments are on time, to protect your credit. Consider a refinance, if you can qualify on your own income.

May 2nd 2013
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Linda Wintersteen (Linda123)
#62 ranked lender in Arizona - 1,256 contributions

Are you looking to redo the loan into your name only? the others gave you advise about looking at your divorce settlement, but what are you asking? linda yourloanpartnerforlife@live.com i have a loan officer right in your area.

May 2nd 2013
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James Mazzola (Mazzola)
#110 ranked lender in New Jersey - 314 contributions

You have to remove you ex-spouseTo better help you, I would like to see your financial situation.Please send me the following information for all borrowers:1. 1 Month of current pay stub's2. 2 Year W-2 Income Statements3. 2 Year 1040 Federal Tax Returns4. 2 Year Business Tax Returns5. 3 Months of current Bank Statements (if you own a business)6. Copy of Drivers Licenses Please forward them to:James Mazzola8 Matthew AvenueKendall Park, NJ 08824jmazzola@sunnm.com or cornoil@comcast.netIf you have any questions, please do not hesitate to contact me:(O) 973-805-4107(C) 732-501-4249(F) 732-951-0629Thank you,James Mazzola

May 3rd 2013
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Raymond Denton (Raymond)
#11 ranked lender in Ohio - 224 contributions

If it's in both your names, I'd refinance it into the name of the person that's going to live in the house.

May 3rd 2013
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Michael Patterson (MichaelPatterson)
#52 ranked lender in Washington - 73 contributions

Kind of an open ended question, but here is a good tip. Most people want to refinance to get the other party off of the loan. Sometimes that isn't possible for various reasons such as not having enough income separately to qualify. I get more questions from people who divorced, awarded the house to the ex-spouse and moved out... and now want to buy a new home even though the mortgage is still in their name. In that situation, on conforming loans if they can prove that there has been 12 months of mortgage payments made solely by the spouse who was awarded the home, (Separate checking account without joint names on the statements) confirmed with the divorce decree of course, and the borrower no longer lives in the home, then we wouldn't count that mortgage payment against them in their debt ratios. It's always better to try to get the mortgage out of the ex-spouse's name and change title ownership whenever possible though. Divorce isn't fun, but having that hang out there can become troublesome. I recommend discussing with an attorney on the financial details if a refi can't be accomplished. Many times there is also alimony involved, and to ensure that the payments are made on time an escrowed account can be set up for the monies to ensure monies are available and directed to the mortgage so nothing affects the credit standing of the other spouse. No legal advice here... just info only! ;)

May 3rd 2013
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Steven Cook (stcookmortgage@gmail.com)
#38 ranked lender in Washington - 256 contributions

A cautionary warning to the party who does not get the house. Should the party keeping the house, sometime in the future fail to make the payments, and the lender forecloses -- that foreclosure will be on both parties' credit records, if the house had not been refinanced (just reviewed person in this situation, bank has been sitting on foreclosure for over year -- can't start timer for new purchase or any other mortgage until the foreclosure completes -- so this party is in limbo until the bank moves forward). If refinancing doesn't make sense, then you may have to move to get it sold, to protect both parties.

May 3rd 2013
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