After Americans get married, a lot of couples choose to purchase a home. This is where they will settle, build careers, maybe raise a family. Unfortunately, statistics show that marriages don’t always last. If divorce occurs, however, a mortgage loan is not altered, and does not disappear.
Currently the housing market is extremely busy. Homes are being purchased within days or even hours of going on the market. According to USA Today, over 60% of homeowners are married. Most mortgages, even if they truly last less than 10 years, are going to last longer than a lot of the marriages.
There are many options when someone is navigating this situation. Hawk Mortgage Group specializes in how to handle mortgages during a divorce settlement. Refinancing is certainly a favorable option in many circumstances. If they refinance, only one of the divorcees could be listed on the loan. Mortgage payments can also be considered alimony in some cases. To explore all options, Hawk Mortgage Group gives consultations on the pros and cons. Whether the couple had a VA home loan, an adjustable rate loan, or an fha loan 2021, Jeff Hawk and his team can assist.
A lot of mortgage companies have limitations on the types of loans and products they can offer. Mortgage brokers are able to offer a much broader spectrum of loans. When dealing with a divorce settlement, the wording in the agreement needs to be clearly defined and coherent. In Marital Settlement Agreements, one person can take over the loan, and this will not count against the other divorcee if they are trying to purchase another home. In other agreements, one may come off the title, but not the mortgage. Debt to income ratios are very important when getting approved for a loan. While going through a divorce, a home mortgage lender may require copies of a property settlement agreement and a legal separation agreement. This way, the lender or broker is able to ascertain who is responsible for what debt, thus shaping the debt to income ratio. If a home has been awarded to a spouse, then the other person should be removed from the deed. Alimony and child support can be added to income for qualification purposes, and this can improve debt to income ratio as well.
There are situations where re-building one’s credit becomes a necessity. There are many ways in which a divorce can drop someone’s credit score. One example would be joint credit cards that are terminated. Getting a personal credit card or two could be a step towards a more stable credit score. Credit scores can rise quite swiftly with a few small maneuvers.
Real estate mortgage loans can be complex. During a divorce, a decision may be made for one ex-spouse to buy out the other ex-spouse, thus allowing one person to stay in the home for continuity. Hawk Mortgage Group is a team of experts that can help navigate the process of getting newly approved. This is necessary if the two-person mortgage loan becomes a one-person mortgage loan. A quitclaim deed may be used to transfer interest in the property from a grantor to a grantee. Certain challenges may add to the complexity after a divorce, as the household income may drop, sometimes drastically. This again not only hurts the debt to income ratio, but may affect the individual’s ability to pay the mortgage each month.
Interest rates for refinancing are currently extremely low. This may be a reasonable, prudent, and satisfying solution when divorce is inevitable. At Hawk Mortgage Group, we’ve worked with dozens of clients that find themselves in this situation. Contact us for a consultation, and we can assist you in finding your way to the next chapter of your life.
725 N. Hickory Avenue; Suite 200
Bel Air, MD
Office : 443-619-7900