Depending on the circumstances of your divorce and what you want to do with your mortgage you may be forced to refinance your home loan after a divorce. The options available to you after divorce include buying out your ex-wife or husband, selling your share of the property to your ex-spouse or selling your home and splitting the money.
Selling Out to Your Ex-Spouse
If you have decided to offload your share of the property to your ex-spouse, then you won’t have to worry about refinancing. Instead your ex will refinance the home loan so that they can purchase your share of the property and buyout any remaining equity in the property. It’s important that if you choose this option that you make sure your name is removed from the property.
Buying Out Your Former Spouse
In order to buy out your ex-spouse you would need to refinance your home loan in order to extend the value of the loan to cover your partner’s share of the property. It is also possible to refinance your mortgage to cover the cost of any divorce settlements. Issues can arise during refinancing when you run into difficulty reaching a figure for property settlement. A mortgage broker can potentially get you a better loan with lower interest rates if you choose to refinance to purchase the full share of the property.
Selling the Property and Splitting the Share
If you and your ex-partner agree to take this option, it is important to consider the factors that determine how the property will be divided up. These factors include financial contributions made to the property, non-financial contributions such as staying at home to take care of kids or the home, potential for future earnings, age, health and also how long your marriage was.
If you are currently going through a divorce and you had owned a property during your marriage it is important to consider these options and what each involves. A broker can help you refinance correctly so that your mortgage does not add further stress in this already difficult situation.
If you would like to learn more about refinancing after divorce and how your mortgage will be affected, please get in touch with us today.