Deciding What to Do With the House after Divorce

News Source: http://firstmortgagerates.ca

Divorce can be painful enough, but it can be worse when you are faced with losing your home at the same time. Finding a suitable replacement can be tricky, particularly if you don’t have a good credit rating and have less income coming in.

It can be a difficult time, but an article in realtybiznews.com points out there are things you can do to help get a new mortgage, and explains what you can reasonably expect. The first thing to do is to decide if you want your name or your ex’s name off the mortgage, depending on the circumstances. If you intend to buy your own property and your ex is still living in the marital home then ideally they need to take over the mortgage in their name only. This will increase your chances of being able to get your own mortgage.

However this might not always be possible, particularly if this is your family home and they can’t refinance the loan on their own. In this case you might need to leave your name on the mortgage for a while, while your ex and kids still live there. This is incredibly common, especially in cases where one partner has worked part-time or not at all in order to look after a young family. It can sometimes be better to agree a time frame where the kids and your ex are able to remain in the home, perhaps until they go to college.

If you do decide to choose this option it is important to agree in advance how the profits will be divided once the house is finally sold. This might not necessarily be an equal split as it is likely one ex-partner will be making a more significant financial  contribution to mortgage payments and maintenance for the home. Not surprisingly this choice only tends to work well if the ex who left the old marital home has sufficient funds to buy a new home of their own in the meantime.

Apparently it is also not a good idea to buy a new home while divorce proceedings are on-going. This is because there could still be question marks over the amount of alimony and child support payments, and some people have lost money on house purchases after being unable to get credit from lenders under these circumstances.  If one of you is unable to buy immediately then you are faced with having to live together a bit longer, which is becoming far more common, or with renting an apartment near the family home until the dust has settled.