Posted February 2nd, 2012 under Divorce & MortgagesTop Six Mortgage Questions When Going Through a Divorce - Question 2
Tags: Seattle Bellevue mortgage, 98004 mortgage, Seattle Bellevue home loans, Seattle Bellevue home mortgage, 98004 home mortgage, divorce refinance, get ex off mortgage, get ex off loan
“My spouse is entitled to share in the equity we have in our home…how is this handled?”
The equity in the home needs to be determined by an appraiser – call us if you need a recommendation and referral. Generally speaking, in a refinance situation, the appraised value less the existing mortgage(s) equals the equity to be split between the parties. This is the amount you will be obligated to give to your ex-spouse. And in general, any money you or your spouse contributed to the home from your own pre-marital assets must also be accounted for in determining the final division of equity. 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 that amount. This means that you will likely have a specified amount of time to obtain the 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. If you choose to stay in the home, you have two financing options to pay your ex-spouse. You can either refinance your home to get cash out, or you can obtain a new second mortgage or home equity loan. This is where you will want the advice of a trusted mortgage professional.
Even though you may now be qualifying for the loan without a spouse’s income – with your own good credit and income, you can usually qualify on your own. Often, child support and alimony is viewed as stable income, if it has been received for three months and is likely to continue for at least three years.