Tips for Refinancing During a Divorce

It may be necessary to consider the process of refinancing during a divorce because this could be the only way to keep the family home. In these situations, it’s important to be mindful of the details and to avoid many common mistakes. Refinances involve borrowers getting a new mortgage loan used to pay off the previous one. Refinances are usually done during the divorce process when one person is staying in the home and the other person wants to give up his or her legal responsibility for the payments.

How Divorce Affects Homes Loans

Refinancing a mortgage during a divorce might be the only choice for a party to keep the family home without additional financial stress. The person who is interested in refinancing the home and keeping it will need to clean up their credit score and obtain sole ownership of the home.

Refinancing without an appropriate credit score can be very difficult and it can lead to a loan that has a very high interest rate attached to it, putting the person who receives the loan in a difficult financial situation. The settlement agreement must be signed/notarized by you and your spouse giving you sole ownership of the home and then this must be further reviewed by a judge.

At the end of the divorce, you should make sure you have these documents. Interest rate quotes can be obtained from a few lenders to ensure that you’re getting the most favorable terms for you.

Schedule a Consultation With a New Jersey Divorce Attorney

Talking to a loan officer directly at the bank may help you get an idea of whether or not they can assist you with discounting loan application fees or providing other benefits. A mortgage company is a big help during this time. The deed to the home must also be obtained after it is drafted by your attorney and fees will need to be paid in order to handle this. If you are concerned about how to otherwise manage the mortgage payments, refinancing may be the only step to protect the family home.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.