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Divorce & House

How long must I wait after a divorce before I can refinance a home awarded to me?

I have a pending divorce and the primary residence mortgage and title is in spouse's name. If the judge from the state of Maine awards me the house in the divorce judgment, will I be able to refinance the home and pay off existing home equity, tax liens that are in spouse's name? Will I have a waiting period before I can refinance it after acquiring title?

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Bill's Answer
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Highlights

  • A mortgage, like a marriage, is a contract.
  • There is no waiting period to refinance after divorce.
  • A quitclaim deed takes a few minutes for a paralegal to prepare.

There is a key misconception in your question I need to address before answering the main issue in your question.

Mortgage

A mortgage is a loan secured by real property and paid in installments over a set period of time. The mortgage secures a promise that the money borrowed will be repaid. A mortgage is formed by contract. Generally speaking, courts are reluctant to alter the terms of a mortgage, and do so for only the most unusual situations. Divorce is not unusual.

A divorce decree does not trump the contract terms in a mortgage to the best of my knowledge. The contract was agreed to when the loan was signed by you and/or your spouse. The divorce did not rewrite the contract. You may ask, "But doesn't the divorce decree trump the loan contract?" No, it does not. Unless a court actually enters into an agreement to change its terms, an existing agreement remains in effect regardless of a subsequent divorce decree. The divorce is a new agreement between the spouses regarding their financial responsibilities, but it is not binding on third parties.

If the court awards you property titled and mortgaged by your spouse, your spouse will most likely execute an interspousal quitclaim deed that gives you all of the rights to the property that your spouse has. A quitclaim deed takes a few minutes for a paralegal to prepare, and even less time for you and your spouse to sign it (usually in the presence of a notary public). The title is the easy part.

The mortgage may be more difficult. It may be more difficult because, typically, a spouse cannot "sign-over" a mortgage to another spouse. This can only happen if your spouse has an assumable mortgage, which are rare. Your first task is to learn if the mortgage is assumable. If it is, you are in luck and all you need to do is complete the forms necessary to assume the mortgage.

Mortgage shopping

If the mortgage is not assumable, which is probably the case, then you need to find a mortgage. This is one area in life where shopping is indeed the solution to your problem. Click on the link I just mentioned to learn what you need to qualify for a mortgage. Or, visit the Bills.com mortgage saving center for no-cost, pre-screened quotes from mortgage lenders.

I am not aware of any waiting period in any state that person must wait before refinancing or securing a new loan following a divorce. Start your shopping now.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

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8 Comments

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  • MS
    Jan, 2012
    melissa
    The Woodlands, TX
    My husband and I were recently divorced. He can't afford to buy me out of the house so during mediation we agreed on a figure (less than 50%) that he would make directly to me using monthly payments. A lien is placed against the house to prevent him selling it without first paying me the figure we agreed. The due date for the first payment has come and gone and he has not paid yet. My questions are: - How long must he be delinquent before I can foreclose? - How do I initiate the foreclosure process? - If I foreclose and take possession of the house to sell it, do I owe him half of the proceeds or is 100% of it mine because he defaulted on his debt to me? Thanks for any info you can provide - I need a new lawyer, one that returns my calls :/
    0 Votes

    • BA
      Jan, 2012
      Bill
      The answer to your questions depends on the documents that you signed, including a loan document and a lien or mortgage document. I recommend that you speak with a lawyer and review those documents and the remedies available to you.
      0 Votes

  • RL
    Mar, 2011
    robin
    Bechtelsville, PA
    i was going to sale my house to my new husband but no one will do this.i need to get my xhusband off the loan asap.my credit is bad what can i do citi did a loan mod for me in my name but did not takee him off the loan
    0 Votes

    • BA
      Mar, 2011
      Bill
      What reason was given for the denial of your present husband's mortgage loan application? A perfect applicant has:
      1. Strong credit score
      2. Two-year steady income history
      3. Low debt-to-income ratio
      4. Down payment, or in the case of a refinance, equity in the property

      Do you and/or your present husband offer each of the above elements?

      0 Votes

    • RL
      Mar, 2011
      robin
      Bechtelsville, PA
      they say you cant sale my home to my new husband it is call a bauil out.citi did a loan mod for me now i have to wait a year to refiance my home cant wait that long court said to get my x husband off the loan
      0 Votes

    • BA
      Mar, 2011
      Bill
      Can your present husband qualify for a mortgage on his own? If so, sell him the home in his name only. If your present husband cannot qualify for a mortgage on his own, then consult with a lawyer about asking the court to give you more time to complete the refinance. If, with the assistance of a lawyer, you have petitioned the court and failed, then talk with your lawyer about your options. If you cannot afford to consult with an attorney, then call your county bar association and ask for the name of the organization in your area that provides no-cost legal advice to people with no or low income. Make an appointment with that organization, and bring all of the documents relating to the divorce, mortgage, and failed refinance attempts to your meeting. The lawyer you meet will advise you accordingly.
      0 Votes

    • RL
      Mar, 2011
      robin
      Bechtelsville, PA
      I had one late payment, citi said, in july. But that is when the loan mod started. Why cant i sale my home to my new husband hes credit is good. she i talk to a realest lawyer. it will take some time to get my credit back. Do you think the courts will give me more time?
      0 Votes

    • BA
      Mar, 2011
      Bill
      I cannot speculate about your divorce decree issue. Consult with a lawyer in your state. Your local courts may grant extensions as a matter of course, or may require you to sell the property immediately. A local lawyer will be able to review all of the relevant facts in person and will explain your options regarding the divorce.

      Regarding selling your home to your present husband, remember what I wrote earlier: Credit score is only one part of the equation. Lenders also look at the potential borrower's income history, debt-to-income ratio, and the down payment or equity in the home.
      0 Votes

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