If you want to move after your Pasadena divorce, you may be wondering how to go about getting a mortgage for your new home.
The first step to getting a new mortgage post-divorce is to settle any current mortgage obligations that you might have. The easiest way to accomplish this is to sell the property, pay off the mortgage entirely, and use the leftover cash as a down payment on a new home. Unfortunately, this isn't always an option.
If selling isn't an option, the next best thing is to have the person remaining in the house refinance the mortgage under his or her name only. Refinancing costs, however, are typically between 3% and 6% of the outstanding balance of the mortgage. You must also consider that not all homeowners are eligible to refinance. If you're "underwater" on the mortgage, for example, refinancing isn't going to work.
If refinancing isn't an option, a lender doesn't have to remove your name from the mortgage post-divorce. This means it's possible to have only your ex living in the home with both of your names on the mortgage. Even if the divorce decree says that your ex is responsible for paying the mortgage, the bank is still legally allowed to come after you if the payments aren't being made.
After you handle the debt associated with your first mortgage, you should attempt to get pre-approved for a new mortgage before house hunting. Think carefully about how large of a payment you can afford considering your post-divorce financial state. If both you and your spouse were working, going from two incomes to one is likely to require a significant adjustment in your lifestyle. Seeing a financial adviser before attempting to secure a new mortgage may be a wise decision.
If you're receiving alimony as part of your divorce settlement, this can be used as a source of income to qualify for a new mortgage as long as you can provide proof that the payments have occurred for at least one year and will continue for at least three years after the purchase of the home.
How Can We Help?
Please call our office at (626) 683-8113 or email us at info@PasadenaLawOffice.com if you are in need of legal representation during your divorce. We are one of the most prominent family law firms in Pasadena and have a staff of highly skilled attorneys ready to handle issues relating to the division of martial assets, spousal support, child support, or child custody.