Today we’re talking about the marital home. A lot of couples facing divorce in Utah, who own a home together are faced with the decision of what to do with it. Common issues are: Will the home be sold or one party keep it? Can I qualify on my own to refinance? How will equity be paid out?
Today we’re joined by Melissa Evans with Guild Mortgage who answers common questions pertaining to the marital home.
Jaclyn: Do you have any tips for divorcing couples who have decided to sell their marital home?
Melissa: When contemplating selling a home, always consult with a realtor to find out how much your home is worth as well as check out the market to see what else is available in your area. You can also see if you can get assistance with commissions because it’s expensive to get divorced and you may be able to save in this area.
Jaclyn: What is the first tip you give couples who come to you wanting to refinance the marital home?
Melissa: The first question I’m typically asked by divorcing couples is, “Can I get my spouse off the mortgage?” Removing a spouse’s name isn’t as easy as it sounds. You can’t just go to your lender and simply ask them to take a name off the mortgage because you both have been obligated on the debt. However lenders do have a lot of compassion for people in this situation and try to make refinancing easier by treating it as a rate and term refinance instead of a cash out equity refinance which typically in the regular market are treated almost the same.
Jaclyn: What you’re saying is couples can’t just come to you and get their spouses name off the mortgage, but they do get other breaks. Explain to us a little more about what that means.
Melissa: Sometimes underwriters will look at things and allow a little easier qualification process. The other thing that might happen is we let them go up to a higher loan to value. As far as taking out more of the equity, you won’t be restricted and depending on how much equity is left, we also talk about splitting the fees between the parties to make sure everything comes out equal.
Jaclyn: What tips do you have for a divorcing spouse who comes to you seeking a refinance but now has to qualify for the loan on their own separate income.
Melissa: You first need to know where all of your income is coming from. If there is alimony or child support, lenders will look at that, but keep in mind you have to actually receive that income for six months before you can use it to qualify for the new loan.
Jaclyn: Essentially what you’re saying, is it’s important to understand that while dividing households, your income can turn on not just your actual income from from your job. Lenders will consider child support and alimony as long as you have it in place for six months and it’s expected to be in place for longer than three years which you can prove to a prospective lender by showing them a copy of your divorce decree.
JR Law Group is a Salt Lake City and Park City Utah based law firm specializing in Divorce and Family Law. To schedule a consultation or find out more, please contact us: (801) 297-8545
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