After a divorce, the financial issues that arise can be difficult to move past, and Brampton Mortgage Broker Rakhi Madan wants to help. Here are your options for your mortgage after a divorce.
The seemingly simplest way to deal with the mortgage is to agree to sell the home and pay off the remainder of the mortgage. However, problems can arise if the amount you have remaining on your mortgage is actually higher than how much your house will sell for, due to the current housing market. If paying off the remainder of the mortgage is not possible, you may have to do a short sale that will affect you and your ex-spouse’s credit scores.
Refinance under One Name
If one of you wants to keep the house, and the other is fine to part with it, refinancing your loan is possible. If you’re the one who wants to keep the home, you should consider carefully whether you can deal with the mortgage in whatever state it is in and whether you will qualify to keep the home with your current income and credit. You bought the home as a couple, so keeping it as a single person will be different.
Find Out if you can Assume your Loan
If you are not able to refinance your loan and you would like to keep the house, you may be able to make a loan assumption. With assuming the loan, you will have to prove that you can make the monthly payments with your current income. Keep in mind that you may have to face higher interest rates.
Continue Splitting the Mortgage Payments
You and your ex-spouse could possibly continue to make mortgage payments through an agreement made between you. How possible this depends on whether you can trust that your spouse can and will continue to make payments on time. If either of you do not make a payment, both of your credit scores could be affected.
The best way to go about this route is to come up with some agreements to protect yourself. For example, if one of you is paying the other alimony, that money could get put directly on the mortgage.
Figuring out what to do with your mortgage after a divorce is no easy task, and we hope this has helped to make the options clearer. Contact Rakhi Madan to get personalized service for your mortgages in Brampton.