A recent statistic from Corelogic indicates that the housing market is showing some positive gains and that as of June 30, 2014, homeowners gained $1 trillion in equity over the previous year, with 44 million homes nationwide having positive equity.
For divorcing couples in San Diego, this means there may be a valuable asset to be divided and a mortgage to be dealt with. Couples have several options when dividing property, a home in particular. If the home is sold and the proceeds divided, whatever mortgage or obligations are on the property are typically paid off using the funds from the sale, when there is equity. If, however, one party wants to keep the home, what is to be done with the mortgage?
One party may buy out the other party’s community interest in the home but then is left with the problem of getting the other spouse off of both the title and the mortgage. With some FHA loans, for example, one spouse may assume the whole mortgage without having to refinance. The party can often avoid refinance fees and keep the current interest rate.
Many spouses want to purchase the property after a divorce. Lending companies will consider the spouse’s new financial picture, which may have become muddled or altered with the debts or obligations after the divorce. Some loans permit tax-deductible liabilities (such as support) to be considered “negative income.” This means that the debt to income ratio will often be in the debtor’s favor. Shopping loans and knowing your options is an important step after the divorce paperwork is completed.
If you have questions regarding asset division during or after a divorce, or want to enforce the provisions of a family law Judgment, use the simple contact form to the right to set up a consultation with our experienced family law attorney.
