Divorce and Your Home

During this difficult time, there are many questions you might be asking, including "Can I keep my house - what are my options?"   Let's break it down so you hopefully have one less thing to worry about! 

If I am the one to receive the home in the settlement, does it make sense?  Take into consideration home size, utilities, payments, family needs, etc.  You will now be entirely responsible for the house payment, upkeep and other related bills.  Your income will most likely be decreasing, so it is imperative that you be aware of what your expenses will be.

Will my spouse receive marital interest in the home?   If so, the equity in the home needs to be determined by an appraiser.  The appraised value - less the costs of selling (commissions and seller closing costs) equals equity to be split between the parties.  This is the amount you will be obligated to give to your ex-spouse.

With the divorce, your spouse may put a marital lien on the property or there may be a court ordered mandate for distribution of the equity.  This means that you have a specified amount of time to obtain the funds needed to give the ex-spouse their portion of the equity.   This can be done by cashing out the equity in the home with a new mortgage or selling the home.

If you choose to stay in the home, you have two financing options to pay your ex-spouse.  You can refinance your home to get cash out or you can obtain a new home equity loan.  This is where you will want the advice of a trusted mortgage professional. 

There are specific rules to qualifying for a new mortgage.  With good credit and income you can qualify on your own (child support and alimony can be counted if received for three months and likelihood of continuance for at least three years.) 

What if I am the one leaving the home?  It is important to know that even though the divorce decree awarded the home to your spouse, you are still obligated for this debt in the eyes of the mortgage company! 

Many people assume that by filing a quit claim deed removing themselves, they are no longer responsible for the mortgage.  A quit claim eliminates your name from the title of the property, not the mortgage.  The benefit of a quit claim deed is that if the one on title passes away, the property will go to their heirs rather than the ex-spouse.

How might it impact my credit - what can I do?  Unfortunately for many, divorce is a time of great financial hardship and credit challenges.  Because you are obligated on the mortgage until it is paid in full, it is imperative that the person responsible for the payment remains current.  One possibility you have is to do a name delete assumption.  If this is done as a none-qualifying assumption, the spouse not receiving the property can have their name removed from statements, but the financial obligation remains the same.  This process can also be used if you are staying in the property and changing back to your maiden name or a new married name.  There is a way to do a qualifying name delete assumption that would relieve the non-occupying spouse from their obligation, but you would have to check with your mortgage servicing company for their procedure and fees. 

What about if I want to go buy a home – am I still obligated because I am on the other loan?  Once you have your final divorce decree, a lender will look at your income and credit to qualify you on your own.  Again, in most situations, child support and alimony must have been received for three months and have at least a three year likelihood of continuance for this income to be used for qualifying.   If the divorce decree states that you are not obligated for the mortgage and the mortgage on the home awarded to your ex-spouse has not been delinquent during the last 12 months, you may be able to qualify without this obligation.

If you want to purchase a home prior to the divorce becoming final, you may be allowed to do this, but be aware that since you are in a community property state your spouse will have a marital interest.  Be very careful with this situation!  You will also have to qualify with the full debt from the current home because there is not a final divorce decree

Taking the time to talk with a mortgage lender before your divorce or before you decide to start looking at a new home can help eliminate much of the concerns and problems that surface in these situations.  Choosing to work with a Trusted Advisor as a mortgage lender is crucial to your financial well being.  Especially during this difficult time.

Take advantage of our FREE mortgage analysis and financial consultation.  Let us help you with all you homeownership needs.

Boost Your Home's Sales Price By Spring: 10 Cheap Ways

MSN Real Estate has a good article today that fits right in with my earlier blog and wanted to link it over for you to have access to read it also.

http://realestate.msn.com/article.aspx?cp-documentid=23360384&GT1=35006

It goes over the 10 things you can do to help boost the listing price of your home. In today's market you need to use all the tools at your disposal to get your property sold.

Tips For Selling Your Home

Unlike other things that you may own, you can never take selling your home lightly. A house is a big commodity, one that is worth a lot of money. Before you even think about selling your home, you should put a lot of thought and consideration into it. Although you may want to sell your home - you should make sure that you do it the right way.

The first thing you should do when you are thinking of selling your home is to hire yourself a qualified real estate agent who knows the neighborhood. An agent who knows your neighborhood will known the ideal price for your home, and help you sell it at the ideal price. If your home is priced right for the neighborhood, chances are it will sell. If it is priced too high, you might not get any offers or anyone interested in buying the home.

Once you have a real estate agent, you and your agent will need to develop a strategy. You’ll need to decide on the price and how long you will leave it on the market before you think about a reduction. You’ll also need to discuss his commission as well, which will help to avoid any misunderstandings in the future. If you talk about these types of things when you first start out selling your home, you’ll find the entire process to go much smoother.

In some cases, you may run out of time before you are able to sell your home. In this situation, you may want to rent out your home. When you rent out your home, you may also be able to strike a deal with renters that your home is available for showing. To make the house accessible to potential buyers, you may want to offer your renters a lower price. This way, they will be more inclined to make the house available for potential buyers.

Keep in mind that selling your home will take you some time. You can also sell it yourself if you prefer, without a real estate agent. This can save you quite a bit of money as well, as you won’t have to pay a real estate agent. If you are planning to go this route, you should make sure that you know the value of your home and you know the neighborhood. You can put a “for sale by owner” sign in the yard, and list your home in local newspapers, and on the Internet as well. This way, you’ll get your home out to the market of potential buyers. Homes that are for sale by the owner are always great for buyers - as they can deal with the owner directly and not have to worry about dealing with any real estate agents.

Determine The Listing Price

When it comes to buying a home, most potential buyers will use the listing price to as the number one factor to determine the homes that they look at. Even though you and a realtor may determine the asking price, the buyer will determine the selling price. If the price is too high, most buyers won’t give it a second thought - which is why you want to determine the listing price carefully.

If you set the correct price, you’ll notice a much faster sale. Setting the right listing price will also attract more potential buyers to your property as well. You’ll also notice an increase in response from realtors, and receive more calls about the property. The listing price is very important - and it can ultimately determine whether or not you sale your property.

A home can be overpriced due to several reasons. Overpricing is something you want to avoid, as buyers tend to steer clear of homes that have been overpriced. Normally, this happens when a buyer asks a lot more than the home is worth or valued at. Some buyers ask a lot more than the value of the home due to location. Although the location is very important, most potential buyers won’t give the home a second look if they think the price is too high - and more importantly out of their price range.

When you put your home up for sale, most activity will happen within the first couple of weeks. If you put the right price on your home, you’ll notice immediate interest. There are always buyers looking for homes in their price range, waiting for new homes to be listed or homes to be reduced in price. Buyers who are waiting to purchase may miss seeing your home completely if the price is too high.

To determine the listing price of your home, you should always have it appraised before you put it on the market. This way, you’ll know the full value of your home. You can sell it for market value or go a little under, although you should never attempt to go way over the value. In doing so, you’ll miss out on a lot of potential buyers. The home market is very competitive these days, which is why you want your home to draw as much interest as possible. Let me know if you need a referral for a certified appraiser in your area. This may be the best investment you can make prior to listing your home if you are unsure what price to list for your property.

Keep in mind that realtors really have no control at all over the real estate market, only the plan behind marketing. Realtors don’t determine the asking price - the seller does. You can ask a realtor for advice, although you are the decider of your listing price. If you do things right and take each thing step by step, you’ll set the listing price in the right area and have no problems selling your property.