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Who gets the mortgage?

By
Real Estate Agent with Orlando Area Real Estate Services

It was not that long ago when people getting divorced found themselves negotiating over the house. Who got to keep it? Who got to move out? How was the whole deal being financed?

Well these days, it's more of a question of who gets the mortgage?

It used to be easy to remove a name from a mortgage and refinance a property in one name only in these situations, but those days are now gone.

A recent example was of a man and woman who filed for divorce more than two years ago. he was going to keep the house because he had custody of the children. She wanted her name off the mortgage and the couple split amicably and were happy with the arrangement.

But the lender said no. The lender didn't want to allow the woman off the hook because obviously the more names they have, the more chance they have of getting their money back should there be a problem. The man doesn't want to refinance because his mortgage payments will go UP by almost $2,000 a month and so now the thing is in limbo.

This is yet another thing that couples splitting up need to take into consideration.

For more real estate advice, contact Simon Conway on 407 876 8200.

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(Copyright © 2008 By Simon L Conway All Rights Reserved.)

Please give me a call if you have questions about the Central Florida real estate market.  You can reach me on 407 876 8200.  Also visit my web site at http://www.simonconway.net/ or http://www.move2orlando.net/

Also remember to check out my weekly radio show - The Home Team - which airs every Sunday at Noon Eastern and if you are not in Central Florida then you can tune in on line at http://www.540wfla.com/

Ken Cook
Content, coding, marketing, host. - Marietta, GA
Content Marketer/Creator
The lender alone determines who qualifies. If the judge orders the husband, in your case, to refinance it doesn't matter that the payments would go up $2000 per month--by court order he refinances. (Unfortunately I know this answer personally.)
Jan 05, 2008 02:53 PM
Simon Conway
Orlando Area Real Estate Services - Orlando, FL
Ouch Ken! Oh and I totally understand that if this was the court order he has to comply, but actually the order was the agreement and the agreement stated that her name be removed from the mortgage. The lender said no (as indeed they were entitled to) and so now they will indeed need an order that he refinance or that they sell the property.
Jan 05, 2008 02:57 PM
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team

Don't we all know a little about divorce and court orders, they are always an ouie in my book.  Used to be lenders didn't have a problem with this and would not be up in the owners business like that, but with all the problems going on.... it is what it is.

Jan 05, 2008 03:17 PM
Simon Conway
Orlando Area Real Estate Services - Orlando, FL
It's a sad state of affairs when you have an amicable split and then this gets in the way. Thanks for your comments Rosemary.
Jan 05, 2008 03:18 PM
Don Wixom
RE/MAX Executives Nampa, ID - Nampa, ID
"Looking out for your next move..."tm
Yes, a lot of people think it's easy..  The mortgage is probably one of the easiest issues pertaining to a divorce...
Jan 06, 2008 06:54 AM
Deb Brooks
Brooks Prime Properties Wichita Falls Texas - Wichita Falls, TX
Well that just does it. I guess for me it will be "till death do us part". Period. I'm heading out for two weeks Simon with no phones, computers, TV, radio or anything else. I'll let ya'll know when I'm back! Deb
Jan 06, 2008 07:07 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F
Divorce is never an easy thing.  I have bought and listed quite a few properties from people who are divorcing.  Things get pretty nasty.  The issue about the mortgage is a big deal because it affects their credit jointly if it is in both names.  Either refinance or sell or own the house as tenants in common.  Those are the only good answers.
Jan 06, 2008 09:02 AM
Rick Kellow
Cherry Creek Mortgage - West Bend, WI
FHA & Reverse Mortgage Expert
Simon you touch on a very difficult part of refinance... divorce is never easy and all to many times the party getting the home is hurt by the unfavorable refi rates...
Jan 06, 2008 10:40 AM
Simon Conway
Orlando Area Real Estate Services - Orlando, FL

Don  - yes, if the couple are being nice to each other and can find a friendly lender

Debra  - yeah I know! I commented on your blog. Have a great trip.

Rob - It's a huge deal. Thanks for your comments.

Rick- those re fi rates can ruin a good divorce! :)

Jan 06, 2008 11:03 AM