Don’t Let Divorce Impact Your Mortgage StatusPosted Thursday, February 27, 2014
If you have come to the difficult decision that divorce is the course of action you must take, don’t compound the grief by allowing mortgage delinquency on your home to tank your credit.
In addition to the emotional toll that divorce can take, there are a lot of financial tolls that can occur as well. Don’t add a poor credit history or foreclosure to the list.
When divorcing and hashing out the financial details, be sure to:
Clearly identify who is responsible for the mortgage payment. No matter who moves out of your home, if you are both on the mortgage, you are both responsible for the mortgage payments. That doesn’t mean you each have to pay half of the payment. It does mean that if the payment is late both of your credit histories will be hurt. The two of you have to decide who pays what percentage of the mortgage payment. Do this immediately (preferably before someone moves out) and get it in writing.
Consider involving an escrow company. If you are not solely responsible for making the mortgage payment, get an escrow company to receive the payments from you and your spouse and send the full mortgage payment in on time. This gives you a record of the payment being made by a third party and the escrow company can let you know if your spouse has not made his or her share of the payment.
Continue to pay your share of the mortgage. Not only do you want to protect your credit but also your contribution to the equity in the home.
Sell or refinance. To get your name off the mortgage, you must either sell or refinance. A quit claim deed does not remove your name from the mortgage; it just takes you off the title.
Discuss these suggestions with your soon-to-be-ex spouse and your attorney. Take the steps needed to secure your financial future.
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