The Sandon Group
Trusted Mortgage Advisors
Divorce and Your Home. There are many questions you might be asking at this time, particularly surrounding your home. We are here to help. Let’s first break down some of the basics.
“I think I want to stay in my home…what do I need to keep in mind?” First, take into consideration the size of the home, utilities, payments, family needs. Does staying in the home truly make sense? You will likely now be entirely responsible for the mortgage payments on the house, taxes, insurance, upkeep, maintenance and other related bills. Your household income may be decreasing, and your overall expenses may be increasing if you are subject to a court order for support, so it is important that you are aware and thorough in determining what your actual expenses will be in keeping and maintaining the home on your own.
“What if I do want to purchase another home before the divorce is final?” This may be possible, but be aware that your spouse may have a marital interest in your new property, and it will need to be handled by your attorney with a Quit Claim Deed being given from your ex-spouse to you. You will also have to qualify for a new mortgage using the full debt from the current homes mortgages, because there would not yet be a final divorce decree assigning ownership. Be very careful with this situation, especially as the financial situation you expect…may not be the final result, once the decree is entered.
Taking the time to talk with us during this process and before you decide to start looking at a new home can help eliminate many of the concerns or questions that often surface in these situations. We understand this may be a very difficult time, and you have many decisions to make. We can provide you with a free financial consultation, credit check, and mortgage strategy review – so that you have the answers and information you need to make good decisions.
The Sandon Group
www.sandongroup.com
(813) 319-6500
Showing posts with label financing. Show all posts
Showing posts with label financing. Show all posts
Friday, December 21, 2007
Thursday, December 13, 2007
Divorce and Sharing Your Home's Equity
The Sandon Group
Financing Your Dreams Into Reality
Frequently asked question: My spouse is entitled to share in the equity we have in our home...how is this handled?
This is a must ask and get answered question before you proceed with your divorce. Your attorney may be excellent in his/her area of expertise, but they do not know the ins and outs, the costs or the market conditions as well as your mortgage professionals.
First, the equity in the home needs to be determined, most often by an appraiser. It is important that the appraiser is licensed and is ethical. You should use an independent appraiser, unrelated to the parties involved, to avoid any bias. Mortgage Loan Officers are the primary source of an appraisers business and can give you a referral to a good appraiser.
The appraised value less the eventual costs of selling (commissions and seller closing costs) equals the equity to be split between the parties. Unfortunately, we have seen often where the equity was split without taking into the cost of selling. This ends up costing the person retaining the home 6-10% of the home's value or $18,000-$30,000 on a $300,000 home.
With the divorce, your spouse may put a marital lien on the property or there may be a court ordered mandate for distribution of the equity, possibly including interest on the amount. This means if you are retaining the home, that you will likely have a specified amount of time to obtain funds needed to give the ex-spouse their portion of the equity. This can be done by cashing out the equity in the home with a new mortgage, selling the home or by using other assets you have to buy out their stake in the home. You will want the advice of a trusted mortgage professional.
If you are the one leaving the home, be sure that there is clear time lines for you to receive your portion of the euqity. You will also want to require that your name be removed from the mortgage note. A "Quit Claim Deed" does not remove you from financial responsibility, only from title. The person retaining the home will either need to refinance your name off of the mortgage or contact your current lender and ask to do a "qualifying name delete assumption".
If you would like additional information or have more questions you can contact me at lsandon@minnmortgage.com.
Financing Your Dreams Into Reality
Frequently asked question: My spouse is entitled to share in the equity we have in our home...how is this handled?
This is a must ask and get answered question before you proceed with your divorce. Your attorney may be excellent in his/her area of expertise, but they do not know the ins and outs, the costs or the market conditions as well as your mortgage professionals.
First, the equity in the home needs to be determined, most often by an appraiser. It is important that the appraiser is licensed and is ethical. You should use an independent appraiser, unrelated to the parties involved, to avoid any bias. Mortgage Loan Officers are the primary source of an appraisers business and can give you a referral to a good appraiser.
The appraised value less the eventual costs of selling (commissions and seller closing costs) equals the equity to be split between the parties. Unfortunately, we have seen often where the equity was split without taking into the cost of selling. This ends up costing the person retaining the home 6-10% of the home's value or $18,000-$30,000 on a $300,000 home.
With the divorce, your spouse may put a marital lien on the property or there may be a court ordered mandate for distribution of the equity, possibly including interest on the amount. This means if you are retaining the home, that you will likely have a specified amount of time to obtain funds needed to give the ex-spouse their portion of the equity. This can be done by cashing out the equity in the home with a new mortgage, selling the home or by using other assets you have to buy out their stake in the home. You will want the advice of a trusted mortgage professional.
If you are the one leaving the home, be sure that there is clear time lines for you to receive your portion of the euqity. You will also want to require that your name be removed from the mortgage note. A "Quit Claim Deed" does not remove you from financial responsibility, only from title. The person retaining the home will either need to refinance your name off of the mortgage or contact your current lender and ask to do a "qualifying name delete assumption".
If you would like additional information or have more questions you can contact me at lsandon@minnmortgage.com.
Tuesday, November 27, 2007
What if I am leaving the home due to divorce?
The Sandon Group
When going through an imminent divorce there are many questions to be asking, particularly surrounding your home.
If you are the one leaving the home, it is important to know that even though the divorce decree may state that your spouse was awarded the home and assumed it's financial obligations, you are still obligated for this debt in the eyes of the mortgage company and the credit bureaus.
Many people, and even some family law attorney's, mistakenly assume that by filing a Quit Claim Deed removing you from the title, that you will no longer be responsible for the mortgage. A Quit Claim Deed only eliminates your name from the title of the property, but not from the mortgage loan.
In our business, we have unfortunately seen first hand the damage this mistaken belief can do to a persons credit and finances.
See my blog "How divorce impacts your credit and what you can do about it"
When going through an imminent divorce there are many questions to be asking, particularly surrounding your home.
If you are the one leaving the home, it is important to know that even though the divorce decree may state that your spouse was awarded the home and assumed it's financial obligations, you are still obligated for this debt in the eyes of the mortgage company and the credit bureaus.
Many people, and even some family law attorney's, mistakenly assume that by filing a Quit Claim Deed removing you from the title, that you will no longer be responsible for the mortgage. A Quit Claim Deed only eliminates your name from the title of the property, but not from the mortgage loan.
In our business, we have unfortunately seen first hand the damage this mistaken belief can do to a persons credit and finances.
See my blog "How divorce impacts your credit and what you can do about it"
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