"Dreams have been undone in the cold light of day, and the home you shared is a house now divided"
Ahh, the golden days. Eyes wide with love, the future stretched out before you in rose petal-covered paths. The wind at your back and the love of your life by your side; and their signature next to yours on the contract to buy that house!
Then life happens.
Those happy dreams have been undone in the cold light of day, and the home you once shared is a house now divided. Ever wonder what happens to that house, and its mortgage, after you divorce? Well, typically, it’s one of two things:
You sell the house, pay off the mortgage, and split the profits with your ex-spouse according to whatever was agreed to in your divorce decree, or;
One party is awarded the house and then must ‘buy’ the other out. This is typically done by refinancing in their name only, signing a new Deed of Trust in only their name, and using the money from the refinance to buy out the other spouse.
Now, whoever is assuming ownership of the house will need to qualify for a mortgage (acceptable income, credit, etc.), on their own. The process is a bit more complicated if you owe more on your house than it is currently worth (you’re ‘underwater’). In these instances, the lender who holds your current mortgage note will have to agree to let you sell the house for less than what you owe them. This is termed a ‘Short Sale’.
Whether you’re selling the house and splitting the profits, refinancing to buy out/get bought out, or need to Short Sale, it’s always best to contact a Realtor who specializes in helping divorced and divorcing couples seamlessly work through this process so they can get on with the rest of their lives.
Credit: Bryan LaFlamme. The LaFlamme Group Powered by Movement Mortgage