Refinance

When Is A Mortgage Refinance Needed In A Divorce?

In some divorce cases, the martial home or other real property has a mortgage attached to it. As part of the divorce, either through settlement or trial, one spouse is receiving sole ownership of the property.

To get the title out of the other spouse's name who is not getting the property, a Quit Claim Deed is almost always needed. However, to get the mortgage out of the other spouse's name, a mortgage refinance is usually needed. In some cases, an assumption agreement might be possible where the spouse receiving the property has excellent credit. But in many cases, a refinance is the only option to remove the other spouse's name from the mortgage.

To refinance the mortgage, the divorce decree and separation agreement is almost always needed. In the divorce decree and separation agreement, it should indicate which party is receiving sole ownership.

The party receiving the property then needs to find a lender who will provide a new loan in the receiving party's name alone. It can be critically important for a party to meet with multiple lenders to ensure that (1) they are getting the best interest rate possible; and (2) ensure that refinance costs and closing fees are reasonable.

As part of the refinance process, a Quit Claim Deed is prepared, signed and followed along with the new mortgage paperwork. This ensures that the title is in the sole name of the receiving spouse. Additionally, the mortgage refinance ensure that the mortgage is in the sole name of the receiving spouse as well.

Ensuring that the refinance takes place can be critically important to the party who is not receiving the martial home or property. Otherwise, if the mortgage payments are not made, or not made on-time, the credit of the spouse who is not receiving the property can be negatively impacted. Where there is a default, a foreclosure might take place.

Divorce Lawyers Assisting With Property Division in Missouri, Illinois and Kansas

If you are going through a divorce where there is property property division, you can contact Stange Law Firm, PC online or at 855-805-0595. We have offices in St. Louis, Kansas City, Columbia, Springfield, Wichita and beyond in the Midwest.