New York couples dealing with a home in the midst of a divorce may face confusion about the best approach to splitting this asset, particularly if a mortgage still exists or if a new mortgage will be sought by either party. This aspect of the division of assets can become even more complicated if communications between the couple are strained or if the property split isn’t amicable. It is important to be aware of one’s credit score for home financing reasons as well as for other financial issues. It is also important to consider options for home division based on each party’s plans.
If a mortgage remains intact through the divorce, with one spouse planning to refinance after the completion of the process, there could be challenges if the refinance is hindered due to low credit scores or other details. Meanwhile, the spouse who is expecting to be bought out may face problems due to having their name still connected with a mortgage, especially if a new mortgage is sought for a separate property.
Similar issues could surface if a house is to be refinanced before a divorce takes place so that the property can go into only one party’s name. It is important to retain copies of relevant records and decrees so that issues can be clarified to future lenders and real estate professionals. Advance provision of important documents can reduce confusion throughout the process, especially for lenders who need to ensure that financial standards have been met by a borrower.
It may be helpful to work with a lawyer who is experienced in dealing with home division issues in a divorce. Meeting far enough in advance to ensure that such details are addressed carefully may be important for limiting losses and frustrations that could arise as a new property or a refinance is considered.
Source: Credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, July 09, 2014