Divorcing couples who own real estate must split their assets fairly upon dissolving the marriage. A qualified mortgage broker in San Antonio can help with refinancing a home after divorce but it’s not always necessary. Learn about the benefits of post-divorce mortgage refinancing and alternative options in this guide.
Consider Selling Your Home to Eliminate the Mortgage
Refinancing during divorce only becomes an issue if one spouse decides to keep the home they once shared. The divorcing couple can agree to split their marital assets in any way, including real estate and financial accounts. While you can advocate to become the sole owner of a home after the marriage ends, you may find it’s easier to sell the house.
Selling your home eradicates the mortgage after divorce. After paying off the remainder of your home loan, closing costs, and other related expenses, you can split the sale’s proceeds for a seamless divorce property settlement.
The Advantages of a Home Refinance After Divorce
Why should you go through the process of refinancing your home after divorce? As long as you or your former spouse decide to stay in the house, you’ll need to make some important mortgage changes post-divorce. The biggest advantages to refinancing in this situation include:
- Removing one name from the mortgage: Say you agree to stay in the home. A refinance loan takes your ex’s name off of the mortgage so you become the sole person responsible for paying back the loan.
- Adjusting the mortgage terms: Changing a mortgage’s terms appeals to many who refinance. To accommodate your finances, you can switch a 30-year loan to a 15-year one and vice versa. Lenders also allow homeowners to select either a fixed-rate or variable-interest loan.
- Accessing home equity: Take advantage of your home equity by opting for a cash-out refinance and receiving funds right away. The cash may go toward home improvement projects or even to settle some common divorce financial implications.
Mortgage Assumption vs. Refinancing Amid a Divorce
Are you still unsure about refinancing your home after divorce but know that you want to keep the house instead of selling it? Talk to a lender about assuming the mortgage. This essentially means that you’ll relieve your ex of their financial responsibilities and become the sole person making payments.
Mortgage assumption serves as a straightforward alternative for divorcing couples but doesn’t allow any of the terms to change. In addition, it’s only available for those without any missed payments. Your lender will typically agree to this after assessing your credit score and debt-to-income ratio.
Explore all of your options before deciding on one that best suits you.
Discover Refinancing Solutions with Champions Mortgage Team
Whether you need help refinancing a home after divorce or reviewing money-saving options like an FHA streamline refinance loan, Champions Mortgage Team is here to help. We assist Texas homeowners with all of their lending needs and promise to guide you through the refinancing process. Call (281) 727-2500 to speak with one of our friendly specialists.
Frequently Asked Questions
Get answers to common questions regarding refinancing during divorce proceedings.
Do You Have to Change the Mortgage’s Terms When Refinancing?
No, changing the mortgage’s terms isn’t necessary though you have the option to do so when refinancing.
Will Refinancing a Mortgage Remove Your Name From the House’s Title?
No, a quitclaim deed will remove someone’s name from a home’s title.
How Can You Complete a Home Refinance After Divorce?
Refinancing a home after divorce involves submitting an application as well as various financial documents. A lender will approve the application and take you through the closing process.
