For the purists, it’s never a good time to part ways with a person you married and planned to the rest of your live with. Irrespective, divorce has become a recurring norm and couples that cannot reconcile their differences can often end up parting ways. However, the decision to divorce may be easy to take; the practical repercussions of it are far reaching and complex.
If you have an outstanding mortgage when you decide to divorce, the divorce more stressful that it should be, especially because it threatens the security of your home. To avoid such stress, this article takes a look at the options you have if you divorce and you have an outstanding mortgage.
Call Your Bank
When you decide you are parting ways, instead of calling your uncles and your friends, the first thing that should be done is for you to call your bank. An outstanding mortgage is no joke and that should be a person’s utmost priority. Inform the bank about the impending situation and clearly tell them that you may be unable to meet the payment schedules until the divorce is completed.
People operating in banks are humans. Most banks are sympathetic towards people who are going through a divorce. Some banks may go as far as postponing your payments until after your divorce is done to help relieve the stress off you. While this may seem like a good momentary relief, the long term problem will continue as is and will need to be resolved.
Looking for Long term Solutions
There are three primary options to deal with mortgage during divorce.
· Keep the Property
For people who are attached to their home, keeping their home could be the easiest thing to do. It is clear that only one of the two partners will want to live in the house and there will be an end to the joint ownership of the property. At this stage the property will need to be transferred to one owner instead of the two. This would mean that the equity and the liability of the property will also be transferred. Once that is completed, the new owner needs to satisfy the lender that they are able to afford the mortgage on their own.
· Mutually Pay the Mortgage
If the mortgage is at an end or will be in the foreseeable future, some couples that part ways on good terms may decide to pay the mortgage together and once the mortgage ends, they can decide on what they want to do with the house.
· Sell It Off
If neither of the spouse is attached to the house and are okay with moving out, perhaps the easiest way to get rid of a mortgage is to sell the house off to a third party, this would help you clear off the mortgage and leave a clean slate for you to separate from your partner.
Divorce and mortgage are a common occurrence together and it is on the mortgagee to decide whether they want to make it complex or not.