The Impact of Divorce on Your Mortgage in WNY
When a couple divorces, dividing assets like the family home is complicated by the joint mortgage. Many spouses believe that a divorce decree removes their mortgage liability. In WNY, a mortgage contract is a separate agreement with your bank, and the lender is not bound by a divorce court's decree.
The Risk of Joint Mortgages
If the divorce decree awards the family home to your spouse, but your name remains on the mortgage, you are still legally responsible for the loan. If your ex-spouse misses mortgage payments, your credit score will suffer, and the bank can target you for repayment. To protect yourself, your name must be removed from the mortgage.
Methods to Remove Mortgage Liability
- Refinancing: The spouse keeping the home can refinance the mortgage in their name alone. This requires them to qualify for the loan based on their individual income.
- Assumption: Asking the lender to assume the mortgage under one spouse's name, which is rarely approved.
- Selling the Property: Selling the home, paying off the joint mortgage in full, and dividing the remaining cash.
Selling the property is the cleanest option to resolve joint debt. Peak Cash Buyers makes this simple by buying the property directly, allowing you to settle the mortgage in a week. See divorce sales in Buffalo.