Mortgage During Divorce Or Second Marriage
Article by Mortgage Guru
Home mortgage is the biggest financial commitment that you will ever make. Making decisions that will fit in your budget and at the same time prove to be a good investment is very crucial. In most mortgages, be it fixed rate or adjustable rate two factors are usually at odds; how predictable the payments are and how low, or affordable, they are at least initially. You may choose fixed rate loan if you are looking at a steady and predictable mortgage payment. But in doing so, you will give up a lower initial mortgage payment. Again if you choose adjustable rate mortgage, the initial payment is low thereby making the house affordable in the beginning but later the payments become high. Therefore you must also be willing to accept the risks involved and be confident of your ability to afford it. Now when the climate is just pleasant with interest rate low you might want to get the best out of mortgage refinancing. But situations like divorce or second marriage can make things complicated especially when you have accumulated significant assets and would like to protect your loved ones in case any unfortunate incident occurs. It can be especially true if you have a reverse mortgage jointly held in your name and your first wife’s name, your second wife may lose the house if you pass away first. To ensure that your spouse will never be under the threat of homelessness, you must finance a home mortgage into a new one in your and your new spouse name. This can be achieved if only you have accumulated equity in the home.If you are considering divorce and intend to keep your home and exonerate your soon-to-be ex-spouse from future mortgage payments, you must refinance your property into a new loan under your name only. It will be challenging if not impossible to find a lender in the first place as he will not be sure if you can afford the payments. You would however be well advised to persevere to find a lender who would be willing to refinance.
To obtain refinance on mortgages it is very crucial to have these few things in place: firstly ensure there is built up equity in home between you and your spouse. Because if you owe more on the house than it is worth, you might not be able to qualify for refinancing. Secondly, you will need a written permission from your spouse to refinance if your spouse’s name is on the original documents. Next, the court must always be notified before you take any large financial steps while a divorce is pending, and you need a letter of permission from the judge in your divorce case to go ahead with refinancing.
Your original lender may be willing to allow you to refinance the home into your own name during a divorce but may not give you the best interest rate on the loan. Further, qualifying for one can be tough if you have a poor credit repayment and unstable income. So be on the look where you can shop around at different banks and credit unions and are able to refinance and secure a lower monthly payment. Being prepared for worse and making sure your loved ones are protected during difficult times is primary,. So look out for a reputed consulting organization that will add value to your saved money.
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