When it comes to marital assets, the family home is typically the single largest asset for a divorcing couple. It is also the one that usually causes the most conflict, especially if minor children are involved. Many times, people want to keep the house without fully considering the financial consequences of their decision and instead make this choice based on emotion alone.
There are several factors that should be examined when determining whether or not to keep a house in a divorce or sell it and split the proceeds. These include:
- The appraised value of the home
- The employment status of both spouses
- The ability of the remaining spouse to refinance the home
- The ability of the remaining spouse to buy out the other spouse
- The alimony and child support obligations
- The availability of cash for a down payment
Prior to the completion of negotiations, a mortgage specialist should be consulted so a divorcing couple can understand all their options. For example, many banks require a certain period of time (typically six months) for alimony to be received before they will consider it a source of income and they may require documentation that alimony and child support will continue to be paid for at least three years after the mortgage application. In addition, a couple’s credit scores may be compromised during a divorce or their new income level might not be enough to qualify for a mortgage now that the same income has to sustain two households.
For these reasons, it is important to know what lending agencies take into consideration when it comes to newly divorced people qualifying for a mortgage loan. There are so many different mortgage products available today that understanding the process is critical to your ability to get approved for a new mortgage.
By handling cases with the dignity and respect they deserve, we have helped many families in New Jersey civilly resolve their divorce, rebuild a satisfying life, and confidently step into the next chapter of their lives. Contact us today for your free consultation.
